Public Service Loan Forgiveness Certification Form

Public Service Loan Forgiveness Certification Form

The U.S. Small Business Administration has released a form of one page which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the latest stimulus law. 

The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgivable loans to help them deal with the financial fallout from the coronavirus outbreak. The law requires that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This was to facilitate the application for forgiveness. Additionally, it included conditions to encourage community banks to lend more particularly to minority-owned businesses that had difficulty getting loans last year.

Public Service Loan Forgiveness Certification Form

“The Small Business Administration met the requirement of releasing the one-page form for loan forgiveness under the PPP by 24 days after 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

Public Service Loan Forgiveness Certification Form – First Draw PPP loans granted to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so within the 8-to 24-week period after the disbursement of loan:

  • Pay and worker levels are ensured
  • The loan funds are used on payroll expenses and other eligible expenses; and
  • A minimum of 60% of the profits go towards payroll costs

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to qualified borrowers are eligible for loan forgiveness when the loan is repaid within an 8– to 24 week period.

  • The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exact same way.
  • The loan proceeds can be used to pay payroll costs or other expenses that are eligible.
  • Minimum 60% of proceeds go to expenses for payroll
  • When and how do I apply for loan forgiveness?

Once all of the loan proceeds have been used, a borrower can apply to be granted forgiveness. Borrowers may apply for forgiveness at any time up to the date of maturity. If the borrower does not apply for forgiveness within 10 months after the end of the covered period, then PPP loan payments can not deferred any longer, and borrowers will begin making loan payments to their PPP lender.

Download Public Service Loan Forgiveness Certification Form

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