The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying for forgiveness of Paycheck Protection Program loans, together with revised and updated forms to comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month and offered $284 billion in funding to small businesses in need of loans. The funds were used to mitigate the economic effects of the coronavirus epidemic. The law requires that the SBA release simplified forms within 24 hours of the signing into law. This was to make it easier to apply for forgiveness. The legislation also contained conditions to encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans last year.
“The Small Business Administration met the requirements to release the one-page form for the forgiveness of PPP loans within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released additional updated forms.”
First Draw PPP Conditions for loan forgiveness
Student Loan Forgiveness Ky – For eligible borrowers, First Draw PPP loans are qualified to be forgiven. This applies when the loan payment is made within an 8 to 24 week period.
- This is also true for pay and benefits for employees.
- The loan proceeds can be used to pay for the cost of payroll as well as other eligible expenses.
- At least 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8– to 24-week duration following loan payment:
- The First Draw PPP loan requires that the compensation and employee levels be maintained in the exact same way.
- The loan proceeds are spent on payroll expenses and other eligible expenses; and
- Minimum 60% of funds go to payroll costs
- How to apply for loan forgiveness , and the time to apply
Once all of the loan’s proceeds have been used The borrower may apply for forgiveness. Borrowers can apply for forgiveness anytime up until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 months after the date of expiration of the time period that was covered, then PPP loan payments are not deferred any longer, and borrowers will begin making payment to their PPP lender.