The U.S. Small Business Administration released a one-page form aimed at simplifying the application process 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.
Congress approved the COVID-19 relief package in the month of March that included $284 billion of financing to small businesses in need of loans. This money was used to reduce the economic burden of the coronavirus outbreak. The package also mandated the SBA to issue streamlined forms within 24 days after the legislation was signed into law to simplify the process of applying for forgiveness, along with conditions meant to encourage more bank loans by community banks, specifically for minority-owned businesses that were unable to obtain loans in the past.
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 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 published the updated forms.”
First Draw PPP Terms of loan forgiveness
Stevens Henager Student Loan Forgiveness – For those who qualify First Draw PPP loans can be suitable to forgive loans. This happens when the loan is disbursed within an 8– to 24 week period.
- The levels of compensation and employee pay are ensured
- The proceeds from the loan may be used to cover the cost of payroll as well as other expenses that are eligible.
- At least 60% of the proceeds are used to pay for payroll expenses
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible borrowers are eligible for loan forgiveness if the loan is paid within an 8to 24 week time frame.
- The levels of compensation and employee pay are maintained in the same manner as is required for the First Draw PPP loan
- The loan proceeds can be used to cover expenses for payroll or other expenses that are eligible.
- At least 60% of profits go towards payroll costs
- How to apply for 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. The borrower can apply for forgiveness at any point up to the date of maturity. Borrowers who don’t request forgiveness within 10 month of the end date of the loan are eligible to receive loan payments from their PPP lender.