The U.S. Small Business Administration released a one-page form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms that meet the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief package in the month of March that offered $284 billion in funding to small businesses that needed loans. The funds were used to offset the economic impact of the coronavirus epidemic. The law required that the SBA provide simplified forms within the first 24 hours of the signing into law. This is to facilitate the application for forgiveness. It also included conditions that would encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans last year.
“The Small Business Administration met the requirement to issue the one page form for the forgiveness of PPP loans 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 new forms.”
First Draw PPP Terms of loan forgiveness
Ppp Loan Forgiveness Form – For eligible borrowers, First Draw PPP loans are eligible to forgive loans. This applies when the loan payment is made within an 8 to 24-week period.
- Pay and worker levels are maintained
- The loan proceeds can be used to pay for payroll costs or other eligible expenses.
- At least 60% of proceeds go to payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness if they do so during the 8– to 24-week duration following loan payment:
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an identical manner.
- The loan proceeds can be used to pay for expenses for payroll or other expenses that are eligible.
- Minimum 60% of funds go to the cost of payroll
- How do I apply for loan forgiveness and when to apply
Once all of the loan funds have been utilized The borrower may apply to be granted forgiveness. Borrowers can request forgiveness at any time up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 months after the date of expiration of the time period that was covered, then PPP loan payments are not deferred any longer, and the borrower will be required to make monthly payments to their PPP lender.
Download Ppp Loan Forgiveness Form
Gallery of Ppp Loan Forgiveness Form
