The U.S. Small Business Administration has issued a one-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the most recent stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help cope with the economic fallout from the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 hours of the bill being approved by the lawmaker to streamline the application process for forgiveness. It also included conditions designed to facilitate more bank loans by community banks, specifically for minority-owned businesses that had trouble getting loans in the past.
“The Small Business Administration met the requirements to release the single-page form for loan forgiveness under the PPP within 24 hours of the date of enactment 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 released new forms.”
First Draw PPP Conditions for loan forgiveness
Ppp Loan Forgiveness Worksheet Excel – For eligible borrowers First Draw PPP loans are qualified to forgive loans. This is when the loan payment is made within an 8 to 24-week timeframe.
- This is also true for compensation and employees.
- The proceeds of the loan 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
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans given to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24-week time period after loan disbursement:
- The First Draw PPP loan requires that the compensation and employee levels be maintained in the exact same way.
- The loan proceeds are used on payroll expenses as well as other eligible expenses and
- At least 60% of profits are used for the cost of payroll
- What is the best time to apply for loan forgiveness?
A borrower may apply for forgiveness once the loan’s proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers may apply for forgiveness at any time until the date of maturity. If they do not file for forgiveness within 10 months of the date of expiration of the time period that was covered and the loan is not renewed, PPP loan payments are no longer deferred and borrowers must make loan payments to their PPP lender.