The U.S. Small Business Administration has released a single-page form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, together with revised and updated forms to meet the requirements of the latest stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of financing for small-scale businesses looking for forgivable loans to help them to deal with the effects of economic collapse from the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 days after the legislation was approved by the lawmaker to streamline the process of applying for forgiveness, along with conditions designed to facilitate more bank loans by community banks, particularly for minority-owned businesses that were unable to obtain loans last year.
“The Small Business Administration met the requirements to release the one page form for loan forgiveness under the PPP within 24 days of 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 new forms.”
First Draw PPP Terms of loan forgiveness
Robert Morris University Student Loan Forgiveness – For those who qualify, First Draw PPP loans are qualified to be forgiven. This applies when the loan payment is made within an 8 to 24-week timeframe.
- The same goes for the employee compensation and the.
- The loan proceeds are used on payroll costs and other eligible expenses; and
- At least 60% of proceeds are spent on payroll costs
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24-week time period after loan disbursement:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exact same way.
- The loan funds are used on payroll costs as well as other eligible expenses and
- Minimum 60% of proceeds go to expenses for payroll
- How and when to apply for loan forgiveness?
After all loan funds have been utilized The borrower may apply to be granted forgiveness. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the date they will be able to repay the loan are able to receive payment from their PPP lender.