Public Service Loan Forgiveness Recertification Form

Public Service Loan Forgiveness Recertification Form

The U.S. Small Business Administration has released a 1-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that comply with the current stimulus law. 

The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgiven loans to help cope with the economic fallout of the coronavirus epidemic. The legislation required that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This was to facilitate the application for forgiveness. It also included conditions that encourage community banks to lend more, especially to minority-owned businesses that had difficulty getting loans last year.

Public Service Loan Forgiveness Recertification Form

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 24 days from 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 issued new forms.”

Terms for forgiveness for the first draw of PPP loans

Public Service Loan Forgiveness Recertification Form – First Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if within the 8 to 24-week period after loan disbursement:

  • Employee and compensation levels are ensured
  • The loan proceeds are spent on payroll as well as other expenses eligible for reimbursement; and
  • A minimum of 60% of the profits are used for the cost of payroll

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans to qualified borrowers are eligible for loan repayment when the loan is paid within an 8– to 24 week time frame.

  • Employee and compensation levels are kept in the same way as required for the First Draw PPP loan
  • The loan proceeds are spent on payroll expenses as well as other eligible expenses and
  • A minimum of 60% of the profits are used to pay for payroll expenses
  • How to request loan forgiveness and the time to apply

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

Download Public Service Loan Forgiveness Recertification Form

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