The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the latest stimulus law.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgiven loans to help cope with the economic fallout from the coronavirus outbreak. The law required that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This was done to simplify the process of applying for forgiveness. The legislation also contained conditions to encourage banks in the community to lend more specifically to minority-owned companies who had a difficult time getting loans in the past.
“The Small Business Administration met the requirements to release the one-page form for PPP loan forgiveness by 24 days after 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 the updated forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness Ga Forms – First Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness within the 8-to 24-week covered period following the loan’s disbursement
- This is also true for compensation and employees.
- The loan proceeds are used on payroll expenses and other expenses that are eligible and
- A minimum of 60% of profits are used to pay for payroll expenses
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during 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 could be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of proceeds are used for the cost of payroll
- When and how do I apply for loan forgiveness
Once all of the loan proceeds have been used The borrower may apply to be granted forgiveness. The borrower can request forgiveness anytime up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months of the end date of the loan are able to receive the loan payment from their PPP lender.