The U.S. Small Business Administration has issued a one-page form that simplifies the application for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the latest stimulus law.
Congress approved the COVID-19 relief package in the month of March, which offered $284 billion in funding for small-scale businesses who needed loans. This money was used to offset the economic impact of the coronavirus epidemic. The law required that the SBA release simplified forms within 24 hours of the signing into law. This was to simplify the process of applying for forgiveness. Additionally, it included conditions to encourage community banks to make more loans, especially to minority-owned businesses that had difficulty getting loans last year.
“The Small Business Administration met the requirements to release the one page form for loan forgiveness under the PPP by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued new forms that were updated.”
First Draw PPP Conditions for loan forgiveness
PPP Loan Forgiveness Application Forms 3508 And 3508ez – For eligible borrowers First Draw PPP loans can be qualified to be forgiven. This is if the loan disbursement occurs within an 8– to 24-week timeframe.
- It’s the same for compensation and employees.
- The loan funds are used on payroll expenses and other eligible expenses; and
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to qualified borrowers are eligible for loan forgiveness if the loan is paid within an 8to 24 week time frame.
- Employee and compensation levels are kept in the same way as required for the First Draw PPP loan
- The loan funds are used on payroll costs as well as other eligible expenses and
- At least 60% of the profits are used to pay for payroll expenses
- How do I apply for loan forgiveness and when
After all loan proceeds have been used The borrower may apply for forgiveness. Borrowers are able to apply for forgiveness at any time prior to the maturity date of the loan. If they do not file for forgiveness within 10 months after the last day of the period covered and the loan is not renewed, PPP loans are not deferred any longer, and the borrower will be required to make monthly payments to their PPP lender.
Download PPP Loan Forgiveness Application Forms 3508 And 3508ez
Gallery of PPP Loan Forgiveness Application Forms 3508 And 3508ez
