The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the latest stimulus law.
Congress approved the COVID-19 relief package in the month of March, which included $284 billion of financing to small businesses that needed loans. The funds were used to mitigate the economic effects of the coronavirus epidemic. The legislation required that the SBA provide simplified forms within 24 hours of the signing into law. This is to facilitate the application for forgiveness. The legislation also contained conditions that encourage community banks to make more loans 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 PPP loan forgiveness within 24 days of the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published updated forms.”
Forgiveness terms in the first draw of PPP loans
PPP Loan Forgiveness Form 3508 S – First Draw PPP loans given to eligible borrowers qualify for full loan forgiveness if within the 8 to 24-week period after loan disbursement:
- This is also true for employee compensation and the.
- The proceeds of the loan can be used to cover expenses for payroll or other eligible expenses.
- At least 60% of the proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24 week time period after loan disbursement:
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the exactly the same manner.
- The loan proceeds are used on payroll expenses as well as other eligible expenses and
- At least 60% of the proceeds are used to pay for payroll expenses
- How to apply for loan forgiveness , and the time to apply
After all loan funds have been utilized, a borrower can apply to be granted forgiveness. Borrowers can request forgiveness at any time up to the date of maturity. If borrowers do not apply for forgiveness within 10 month of the expiration date of the loan are able to receive loan payments from their PPP lender.
Download PPP Loan Forgiveness Form 3508 S
Gallery of PPP Loan Forgiveness Form 3508 S
