The U.S. Small Business Administration has issued a one-page form that simplifies the application for forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the most recent stimulus law.
Congress approved the COVID-19 relief package in the month of March that provided $284 billion of funding to small businesses in need of loans. The funds were used to reduce the economic burden of the coronavirus outbreak. The package also mandated the SBA to issue simplified forms within 24 hours of the bill being approved by the lawmaker to streamline the process of applying for forgiveness. It also included conditions that aim to increase the number of loans from community banks, especially for minority-owned companies that had trouble getting loans in the past.
“The Small Business Administration met the requirement to issue the one-page form for the forgiveness of PPP loans within 24 hours of the date of the 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 issued new forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness For Nurses In Tennessee – First Draw PPP loans made to borrowers who are eligible can be granted full loan forgiveness if within the 8-to 24-week period after the loan’s disbursement
- Pay and worker levels are maintained
- The loan funds are used on payroll costs and other eligible expenses; and
- At least 60% of the proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans for eligible customers are qualified for loan forgiveness when the loan is repaid within an 8– to 24 week period.
- The levels of compensation and employee pay are maintained in the same way as required for the First Draw PPP loan
- The loan funds could be used to cover payroll costs or other eligible expenses.
- Minimum 60% of proceeds go to payroll costs
- How to apply for loan forgiveness , and when
After all loan’s proceeds have been used, a borrower can apply to be forgiven. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 months after the date they will be able to repay the loan are able to receive loan payments from their PPP lender.