The U.S. Small Business Administration has released a single-page form aimed at simplifying the application process for the forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms that comply with the most recent stimulus legislation.
The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 days of the legislation being approved by the lawmaker to streamline the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, specifically for minority-owned businesses who had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 hours of 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.”
First Draw PPP Loan forgiveness terms
Public Service Loan Forgiveness Announcement – For those who qualify, First Draw PPP loans can be qualified for loan forgiveness. This is when the loan is disbursed within an 8 to 24-week period.
- This is also true for pay and benefits for employees.
- The proceeds from the loan may be used to pay the cost of payroll as well as other expenses that are eligible.
- At least 60% of the proceeds are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans to qualified borrowers are eligible for loan repayment if the loan is paid within an 8– 24-week time frame.
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the exactly the same manner.
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- At least 60% of the proceeds are used to pay for payroll expenses
- How to apply for loan forgiveness and when
After all loan proceeds have been used the borrower is eligible to be forgiven. The borrower can request forgiveness at any time prior to the maturity date of the loan. If they do not file for forgiveness within 10 months of the end of the covered period the PPP loan payments can not deferred any longer, and the borrower will be required to make monthly payments to their PPP lender.
Download Public Service Loan Forgiveness Announcement
Gallery of Public Service Loan Forgiveness Announcement
