The U.S. Small Business Administration released a one-page form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them to deal with the effects of economic collapse of the coronavirus epidemic. The legislation required that the SBA issue simplified forms within 24 hours of the signing into law. This was done to make it easier to apply for forgiveness. Additionally, it included conditions that encourage community banks to lend more particularly to minority-owned businesses who were unable to obtain loans in the past.
“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, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released new forms.”
First Draw PPP Conditions for loan forgiveness
Student Loan Forgiveness For Nurses In Georgia – For those who qualify, First Draw PPP loans are suitable for loan forgiveness. This happens if the loan disbursement occurs within an 8– to 24-week timeframe.
- This is also true for pay and benefits for employees.
- The proceeds from the loan may be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of the proceeds are used to pay for payroll expenses
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to eligible customers are eligible for loan forgiveness when the loan is repaid within an 8to 24 week time frame.
- Employee and compensation levels are maintained in the same manner as is required for the First Draw PPP loan
- The loan funds are used on payroll expenses and other expenses that are eligible and
- At least 60% of profits are used to pay for payroll expenses
- How and when to apply for loan forgiveness?
The borrower is eligible for forgiveness after all loan proceeds to which the borrower is requesting forgiveness have been used. The borrower can apply for forgiveness at any time up to the loan’s maturity date. Borrowers who don’t request forgiveness within 10 month of the end date of the loan are able to receive loan payments from their PPP lender.