The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, as well as newly updated and revised forms to meet the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month, which provided $284 billion of funding to small businesses in need of loans. This money was used to mitigate the economic effects of the coronavirus epidemic. The law requires that the SBA release simplified forms within 24 hours of the signing into law. This is to simplify the process of applying for forgiveness. It also included conditions that would encourage community banks to make more loans, especially to minority-owned businesses that had difficulty getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within 24 days from the date of enactment under the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms that were updated.”
First Draw PPP Conditions for loan forgiveness
Student Loan Forgiveness Florida – 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 that follows the loan’s disbursement
- This is also true for compensation and employees.
- The loan funds are used on payroll and other expenses that are eligible and
- At least 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans for eligible borrowers are eligible for loan forgiveness when the loan is paid within an 8– to 24-week time frame.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exact same way.
- The loan proceeds are spent on payroll and other eligible expenses; and
- Minimum 60% of profits go towards the cost of payroll
- How to request loan forgiveness and the time to apply
When all of the loan funds have been utilized the borrower is eligible to be forgiven. Borrowers can request forgiveness at any time up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 months of the last day of the time period that was covered, then PPP loan payments are no longer deferred, and the borrower will be required to make loan payments to their PPP lender.