The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, as well as newly updated and revised forms that meet the requirements of the latest stimulus legislation.
The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiven loans to help deal with the financial fallout of the coronavirus epidemic. The law required that the SBA issue simplified forms within the first 24 hours of the signing into law. This was done to make it easier to apply for forgiveness. It also included conditions to encourage banks in the community to lend more specifically to minority-owned companies 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 obligation to issue the one-page form for PPP loan forgiveness within 24 days from the date of enactment in the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued more updated forms.”
Forgiveness terms in the initial draw of PPP loans
Stimulus Student Loan Forgiveness – First Draw PPP loans given to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8- to 24-week period after the disbursement of loan:
- It’s the same for compensation and employees.
- The proceeds of the loan can be used to cover payroll costs or other expenses that are eligible.
- At least 60% of funds go to payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8to 24 week time period after loan payment:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the exact same way.
- The proceeds of the loan can be used to cover expenses for payroll or other eligible expenses.
- At least 60% of proceeds are used for the cost of payroll
- What is the best time to apply for loan forgiveness?
Once all of the loan’s proceeds have been used the borrower is eligible to be forgiven. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 months of the last day of the time period that was covered and the loan is not renewed, PPP loan payments are not deferred any longer, and borrowers will begin making loan payments to their PPP lender.
Download Stimulus Student Loan Forgiveness
Gallery of Stimulus Student Loan Forgiveness
