Service Loan Forgiveness Form

Service Loan Forgiveness Form

The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms that conform to the requirements of the most recent stimulus legislation. 

The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiven loans to help cope with the economic fallout from the coronavirus pandemic. It included a requirement for the SBA to issue simplified forms within 24 days of the legislation being adopted to make the application process for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, specifically for minority-owned companies that struggled to get loans in the past.

Service Loan Forgiveness Form

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP 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 issued new forms.”

Terms for forgiveness for the first draw of PPP loans

Service Loan Forgiveness Form – First Draw PPP loans granted to eligible borrowers qualify for complete loan forgiveness if they do so within the 8 to 24 week period that follows the disbursement of loan:

  • Employee and compensation levels are ensured
  • The proceeds from the loan may be used to pay payroll costs or other eligible expenses.
  • At least 60% of funds go to expenses for payroll

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans for eligible borrowers are eligible for loan repayment if the loan is paid within an 8to 24 week period.

  • The First Draw PPP loan requires that the compensation and employee levels be maintained in an exactly the same manner.
  • The loan funds are used on payroll costs and other expenses that are eligible and
  • At least 60% of profits go towards expenses for payroll
  • How do I apply for loan forgiveness and the time to apply

The borrower is eligible for forgiveness only after all loan proceeds for which the borrower is requesting forgiveness have been used. The borrower can apply for forgiveness at any point up to the date of maturity. Borrowers who do not request forgiveness within 10 months after the date they will be able to repay the loan are eligible to receive the loan payment from their PPP lender.

Download Service Loan Forgiveness Form

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