The U.S. Small Business Administration released a one-page form designed to make it easier for applicants to complete the application process for the forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms that conform to the requirements of the latest stimulus legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgivable loans to help them cope with the economic fallout from the coronavirus pandemic. The legislation required that the SBA issue simplified forms within 24 hours after the bill’s passage into law. This was done to make it easier to apply for forgiveness. The legislation also contained conditions that encourage banks in the community to lend more, especially to minority-owned businesses who were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within the first 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released additional updated forms.”
Forgiveness terms in the first draw of PPP loans
Public Service Loan Forgiveness Program Phone Number – For those who qualify First Draw PPP loans can be qualified for loan forgiveness. This applies if the loan disbursement occurs within an 8– to 24 week period.
- This is also true for employee compensation and the.
- The loan proceeds can be used to pay for payroll costs or other expenses that are eligible.
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to qualified borrowers can be qualified for loan forgiveness when the loan is repaid within an 8– 24-week time frame.
- Pay and worker levels are maintained in the same manner as required for the First Draw PPP loan
- The loan funds are used on payroll as well as other eligible expenses and
- Minimum 60% of profits go towards the cost of payroll
- How to apply for loan forgiveness , and the time to apply
The borrower is eligible for forgiveness after all loan proceeds for which the borrower wants forgiveness have been utilized. The borrower can request forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months of the end date of the loan are eligible to receive the loan payment from their PPP lender.