The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that comply with the current stimulus law.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them cope with the economic fallout from the coronavirus pandemic. It also included a requirement that the SBA to issue streamlined forms within 24 hours of the legislation being adopted to make the procedure of applying for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, specifically for minority-owned businesses who struggled to get loans last year.
“The Small Business Administration met the requirement to issue the one page form for PPP loan forgiveness within 24 days of the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of 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 Conditions for loan forgiveness
Student Loan Forgiveness Iowa Nurses – First Draw PPP loans made to borrowers who are eligible can be granted total loan forgiveness within the 8-to 24-week period after the loan’s disbursement
- The same goes for the compensation and employees.
- The loan funds are used on payroll expenses and other expenses that are eligible and
- A minimum of 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible borrowers are qualified for loan forgiveness when the loan is paid within an 8– 24 week period.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exactly the same manner.
- The loan proceeds are spent on payroll and other expenses that are eligible and
- A minimum of 60% of the proceeds are used for the cost of payroll
- How to request loan forgiveness and the time to apply
The borrower is eligible for forgiveness after the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. The borrower can apply for forgiveness at any time until the date of maturity. If borrowers do not apply for forgiveness within 10 month after the date they will be able to repay the loan are eligible to receive the loan payment from their PPP lender.