The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the application process for forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month and included $284 billion of financing to small businesses in need of loans. This money was used to offset the economic impact of the coronavirus epidemic. The package also mandated the SBA to issue streamlined forms within 24 hours of the legislation being signed into law to simplify the application process for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, especially for minority-owned companies that had trouble getting loans last year.
“The Small Business Administration met the requirements to release the one-page form for loan forgiveness under the PPP within 24 days of 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 published updated forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness For Doctors – First Draw PPP loans granted to borrowers who are eligible can be granted total loan forgiveness within the 8-to 24 week period that follows the disbursement of loan:
- The same goes for the employee compensation and the.
- The proceeds of the loan can be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of the proceeds go to payroll costs
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans for eligible borrowers are eligible for loan repayment when the loan is repaid within an 8to 24-week time frame.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the identical manner.
- The loan proceeds are spent on payroll and other eligible expenses; and
- At least 60% of proceeds go to expenses for payroll
- How do I request loan forgiveness and when to apply
The borrower is eligible for forgiveness only after the loan’s proceeds for which the borrower wants forgiveness have been utilized. Borrowers may apply for forgiveness at any point up to the date of maturity. Borrowers who don’t 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.