The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying for the forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to conform to the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March, which offered $284 billion in funding for small-scale businesses who needed loans. The funds were used to reduce the economic burden of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 hours of the legislation being signed into law to simplify the process of applying for forgiveness, along with conditions designed to facilitate more bank loans by community banks, particularly for minority-owned companies that struggled to get loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to issue the PPP form, which is one page long, for loan forgiveness within 24 days of the date of enactment in the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published more updated forms.”
Terms for forgiveness for the first draw of PPP loans
Student Loan Forgiveness For Paraprofessionals – First Draw PPP loans made to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so during the 8- to 24-week period after the disbursement of loan:
- The same goes for the pay and benefits for employees.
- The proceeds of the loan can be used to cover the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the profits go towards the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans made to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24-week duration following loan payment:
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the exactly the same manner.
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- At least 60% of the proceeds are used for the cost of payroll
- How to request loan forgiveness and when
Once all of the loan proceeds have been used The borrower may apply to be forgiven. Borrowers can request forgiveness at any time until the date at which the loan matures. Borrowers who don’t request forgiveness within 10 month of the end date of the loan will be able to receive loan payments from their PPP lender.
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