The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms to comply with the most recent stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 hours after the legislation was signed into law to simplify the procedure of applying for forgiveness. It also included conditions that aim to increase the number of loans from community banks, especially for minority-owned businesses that struggled to get loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 days of the date of enactment under the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued more updated forms.”
First Draw PPP Terms of loan forgiveness
Public Service Loan Forgiveness Pslf Form – First Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness if they do so within the 8 to 24 week period that follows loan disbursement:
- Pay and worker levels are ensured
- The loan proceeds are spent on payroll costs as well as other expenses eligible for reimbursement; and
- A minimum of 60% of the proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans to eligible borrowers are eligible for loan repayment if the loan is paid within an 8– to 24-week period.
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
- The loan proceeds are spent on payroll costs as well as other eligible expenses and
- At least 60% of proceeds go to payroll costs
- How do I request loan forgiveness and when to apply
After all loan’s proceeds have been used, a borrower can apply for forgiveness. Borrowers can apply for forgiveness anytime up until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 months of the end of the period covered and the loan is not renewed, PPP loan payments are no longer deferred and borrowers will begin making loan payments to their PPP lender.