The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month, which provided $284 billion of funding for small-scale businesses who needed loans. The funds were used to offset the economic impact of the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within 24 days after the legislation was approved by the lawmaker to streamline the application process for forgiveness, along with conditions that aim to increase the number of loans from community banks, specifically for minority-owned businesses that struggled to get 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 PPP form loan forgiveness within the first 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued updated forms.”
First Draw PPP Conditions for loan forgiveness
Student Loan Forgiveness For Counselors 2022 – For borrowers who are eligible, First Draw PPP loans are eligible for loan forgiveness. This applies if the loan disbursement occurs within an 8 to 24-week period.
- The levels of compensation and employee pay are ensured
- The loan proceeds can be used to pay payroll costs or other expenses that are eligible.
- At least 60% of proceeds go to the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24 week covered period following loan disbursement:
- The levels of compensation and employee pay are maintained in the same way as required for the First Draw PPP loan
- The proceeds of the loan can be used to pay for payroll costs or other expenses that are eligible.
- At least 60% of profits go towards expenses for payroll
- How do I request loan forgiveness and the time to apply
After all loan proceeds have been used, a borrower can apply to be granted forgiveness. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. 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.