Ppp Loan Forgiveness Application Instructions

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 is also updated with new forms that comply with the latest stimulus law. 

The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion in funding for small businesses seeking forgiveness loans to help them cope with the economic fallout from the coronavirus outbreak. The package also mandated the SBA to issue streamlined forms within 24 days of the legislation being adopted to make the process of applying for forgiveness, along with conditions that aim to increase the number of loans from community banks, particularly for minority-owned businesses who had trouble getting loans in the past.

Ppp Loan Forgiveness Application Instructions

“The Small Business Administration met the requirements to release the one-page form for loan forgiveness under the PPP within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued new forms.”

First Draw PPP Loan forgiveness terms

Ppp Loan Forgiveness Application Instructions – First Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness during the 8- to 24 week period that follows loan disbursement:

  • The levels of compensation and employee pay are maintained
  • The loan proceeds are used on payroll and other expenses that are eligible and
  • A minimum of 60% of the profits are used for the cost of payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to eligible customers are qualified for loan forgiveness when the loan is paid within an 8to 24 week time frame.

  • The First Draw PPP loan requires that the employee and compensation levels are maintained in the exactly the same manner.
  • The loan funds are used on payroll expenses and other eligible expenses; and
  • At least 60% of profits are used to pay for payroll expenses
  • When and how do I apply for loan forgiveness?

After all loan’s proceeds have been used the borrower is eligible to be granted forgiveness. The borrower can apply for forgiveness at any time until the loan’s maturity date. Borrowers who do not request forgiveness within 10 months of the end date of the loan will be able to receive the loan payment from their PPP lender.

Download Ppp Loan Forgiveness Application Instructions

Gallery of Ppp Loan Forgiveness Application Instructions

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