The U.S. Small Business Administration released a one-page form that aims to simplify the application process to forgive Paycheck Protection Program loans, along with newly revised and updated forms to comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief package in the month of March, which included $284 billion of financing for small-scale businesses who needed loans. The money was intended to offset the economic impact of the coronavirus epidemic. It included a requirement for the SBA to issue streamlined forms within the first 24 hours of the legislation being adopted to make the process of applying for forgiveness. It also included conditions that aim to increase the number of loans from community banks, particularly for minority-owned companies that struggled to get loans last year.
“The Small Business Administration met the requirement of releasing the one page form for PPP loan forgiveness by 24 days after the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued new forms that were updated.”
Terms for forgiveness for the initial draw of PPP loans
Student Loan Forgiveness Application Online – First Draw PPP loans made to eligible borrowers qualify for total loan forgiveness during the 8- to 24-week period after loan disbursement:
- Employee and compensation levels are maintained
- The proceeds of the loan can be used to pay payroll costs or other expenses that are eligible.
- At least 60% of the proceeds are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans for eligible customers are qualified for loan forgiveness when the loan is repaid within an 8– 24 week period.
- The levels of compensation and employee pay are maintained in the same manner as required for the First Draw PPP loan
- The loan proceeds can be used to pay for expenses for payroll or other expenses that are eligible.
- Minimum 60% of profits go towards payroll costs
- How and when to apply for loan forgiveness?
A borrower can apply for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been used. Borrowers may apply for forgiveness at any point up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 years of the end of the time period that was covered and the loan is not renewed, PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.
Download Student Loan Forgiveness Application Online
Gallery of Student Loan Forgiveness Application Online
