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 updated and revised forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion in funding for small businesses seeking forgiven loans to help cope with the economic fallout of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 days of the legislation being adopted to make the application process for forgiveness. The legislation also contained conditions that aim to increase the number of bank loans by community banks, specifically for minority-owned businesses that struggled to get loans in the past.
“The Small Business Administration met the requirement of releasing the one page form for loan forgiveness under the PPP within 24 hours of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released new forms that were updated.”
First Draw PPP Loan forgiveness terms
Student Loan Forgiveness For Everest College – For borrowers who are eligible, First Draw PPP loans can be qualified to be forgiven. This is if the loan disbursement occurs within an 8 to 24-week period.
- Pay and worker levels are ensured
- The loan proceeds can be used to cover 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 made to eligible borrowers qualify for complete loan forgiveness, if within the 8– to 24-week time period after loan disbursement:
- Employee and compensation levels are kept in the same way as is required for the First Draw PPP loan
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- A minimum of 60% of the profits go towards payroll costs
- How do I request loan forgiveness and when to apply
A borrower may apply for forgiveness after all loan proceeds for which the borrower has applied for forgiveness have been used. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan will be able to receive loan payments from their PPP lender.