The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms to comply with the most recent stimulus legislation.
The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help deal with the financial fallout of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within the first 24 hours of the bill being approved by the lawmaker to streamline the procedure of applying for forgiveness, along with conditions meant to encourage more loans from community banks, particularly for minority-owned businesses who struggled to get loans last year.
“The Small Business Administration met the requirements to release the one-page form for the forgiveness of PPP loans within 24 days 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 published new forms.”
First Draw PPP Conditions for loan forgiveness
Public Employee Student Loan Forgiveness – For eligible borrowers First Draw PPP loans are suitable to forgive loans. This applies when the loan is disbursed within an 8– to 24-week timeframe.
- The levels of compensation and employee pay are ensured
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- At least 60% of profits are used to pay for payroll expenses
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to eligible borrowers are eligible for loan forgiveness when the loan is repaid within an 8to 24-week period.
- The First Draw PPP loan requires that the employee and the compensation levels are maintained in the exact same way.
- The loan funds can be used to pay the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the proceeds are used for the cost of payroll
- When and how do I apply for loan forgiveness?
After all loan’s proceeds have been used the borrower is eligible to be forgiven. The borrower can apply for forgiveness at any time up to the date at which the loan matures. If they do not file for forgiveness within 10 years of the date of expiration of the covered period, then PPP loan payments are not deferred any longer, and borrowers will begin making monthly payments to their PPP lender.
Download Public Employee Student Loan Forgiveness
Gallery of Public Employee Student Loan Forgiveness
