Public Loan Forgiveness Employment Certification Form

The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process for forgiveness of Paycheck Protection Program loans, together with revised and updated forms to meet the requirements of the most recent stimulus legislation. 

The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. The law requires that the SBA issue simplified forms within 24 hours of the legislation’s signing into law. This is to simplify the process of applying for forgiveness. Additionally, it included conditions to encourage community banks to lend more particularly to minority-owned businesses who were unable to obtain loans last year.

Public Loan Forgiveness Employment Certification Form

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within 24 hours from the date of enactment under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms that were updated.”

Forgiveness terms for the first draw of PPP loans

Public Loan Forgiveness Employment Certification Form – First Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if within the 8 to 24-week period after the disbursement of loan:

  • The levels of compensation and employee pay are ensured
  • The proceeds of the loan can be used to cover payroll costs or other expenses that are eligible.
  • A minimum of 60% of the proceeds go to the cost of payroll

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness, if within the 8to 24-week time period after loan disbursement:

  • Employee and compensation levels are kept in the same way as required for the First Draw PPP loan
  • The loan funds are used on payroll expenses and other expenses that are eligible and
  • A minimum of 60% of the proceeds go to the cost of payroll
  • How to request loan forgiveness and when

The borrower is eligible for forgiveness after all loan proceeds to which the borrower wants forgiveness have been utilized. The borrower can request forgiveness at any time prior until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 month after the date they will be able to repay the loan will be able to receive payment from their PPP lender.

Download Public Loan Forgiveness Employment Certification Form

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