PPP Loan Forgiveness Application January 2021

The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the current stimulus legislation. 

The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion in funds for small businesses that want forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. The law requires that the SBA release simplified forms within 24 hours of the signing into law. This is to facilitate the application for forgiveness. It also included conditions that would encourage banks in the community to lend more specifically to minority-owned companies who were unable to obtain loans last year.

PPP Loan Forgiveness Application January 2021

“The Small Business Administration met the requirement to issue the one page form for PPP loan forgiveness within 24 hours of the date of 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 more updated forms.”

Forgiveness terms in the first draw of PPP loans

PPP Loan Forgiveness Application January 2021 – For eligible borrowers, First Draw PPP loans can be eligible for loan forgiveness. This applies when the loan is disbursed within an 8- to 24-week timeframe.

    • The same goes for the pay and benefits for employees.
    • The proceeds from the loan may be used to pay for the cost of payroll as well as other eligible expenses.
    • A minimum of 60% of the profits are spent on payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans for eligible borrowers are eligible for loan repayment if the loan is paid within an 8- 24-week time frame.

    • Pay and worker levels are kept in the same way as required for the First Draw PPP loan
    • The loan proceeds are used on payroll expenses as well as other eligible expenses and
    • A minimum of 60% of profits are spent on payroll costs
    • How to apply for loan forgiveness , and the time to apply

A borrower can apply for forgiveness only after all loan proceeds for which the borrower has applied for forgiveness have been used. Borrowers are able to apply for forgiveness any time up until the date of maturity of the loan. If they do not file for forgiveness within 10 years of the date of expiration of the period covered, then PPP loan payments can no longer deferred, and borrowers will begin making payment to their PPP lender.

Download PPP Loan Forgiveness Application January 2021

Gallery of PPP Loan Forgiveness Application January 2021

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