The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms to comply with the current stimulus legislation.
Congress approved the COVID-19 relief plan last month, which included $284 billion of financing to small businesses in need of loans. This money was used to offset the economic impact of the coronavirus pandemic. The law required that the SBA release simplified forms within 24 hours of the signing into law. This is to facilitate the application for forgiveness. Additionally, it included conditions that encourage banks in the community to lend more particularly to minority-owned businesses that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within the first 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms.”
First Draw PPP Conditions for loan forgiveness
PPP Loan Forgiveness Ez Form 2021 – First Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8- to 24 week period that follows loan disbursement:
- Pay and worker levels are maintained
- The proceeds from the loan may be used to pay the cost of payroll as well as other eligible expenses.
- A minimum of 60% of the proceeds go to expenses for payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8– to 24-week duration following the loan’s disbursement
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the exact same way.
- The proceeds of the loan can be used to pay for the cost of payroll as well as other expenses that are eligible.
- At least 60% of profits are used for the cost of payroll
- How to apply for loan forgiveness and when
A borrower can apply for forgiveness after the loan’s proceeds for which the borrower is requesting forgiveness have been used. Borrowers can request forgiveness at any point up to the date at which the loan matures. If they do not file for forgiveness within 10 months of the end of the period covered and the loan is not renewed, PPP loan payments can no longer deferred, and borrowers must make monthly payments to their PPP lender.
Download PPP Loan Forgiveness Ez Form 2021
Gallery of PPP Loan Forgiveness Ez Form 2021
