The U.S. Small Business Administration released a one-page form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, together with updated and revised forms that comply with the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March, which offered $284 billion in funding to small businesses in need of loans. This money was used to offset the economic impact of the coronavirus pandemic. The legislation required that the SBA issue simplified forms within 24 hours after the bill’s passage into law. This was to make it easier to apply for forgiveness. It also included conditions to encourage banks in the community to lend more, especially to minority-owned businesses who had a difficult time getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms that were updated.”
First Draw PPP Conditions for loan forgiveness
Sc Student Loan Forgiveness Forms – First Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness within the 8-to 24 week period that follows loan disbursement:
- Pay and worker levels are maintained
- The loan proceeds are used on payroll expenses and other expenses that are eligible and
- A minimum of 60% of the profits are used to pay for payroll expenses
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans made to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24 week duration following the loan’s disbursement
- Employee and compensation levels are maintained in the same way in accordance with the First Draw PPP loan
- The loan proceeds could be used to pay for payroll costs or other expenses that are eligible.
- A minimum of 60% of the proceeds are used for the cost of payroll
- How to apply for loan forgiveness , and the time to apply
When all of the loan funds have been utilized the borrower is eligible to be granted forgiveness. Borrowers are able to apply for forgiveness any time up until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 months of the end date of the loan will be able to receive payment from their PPP lender.