The U.S. Small Business Administration released a one-page form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, together with updated and revised forms to comply with the most recent stimulus legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help deal with the financial fallout of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within the first 24 hours of the legislation being signed into law to simplify the procedure of applying for forgiveness. It also included conditions that aim to increase the number of bank loans by community banks, particularly for minority-owned businesses that had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 days from the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued more updated forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness Mn – For those who qualify First Draw PPP loans can be qualified to be forgiven. This is if the loan disbursement occurs within an 8– to 24-week period.
- The levels of compensation and employee pay are kept at a constant level.
- The loan funds are used on payroll expenses and other eligible expenses; and
- Minimum 60% of funds go to payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24-week duration following loan disbursement:
- Employee and compensation levels are kept in the same way in accordance with the First Draw PPP loan
- The loan funds are used on payroll costs and other expenses that are eligible and
- At least 60% of funds go to the cost of payroll
- How to apply for loan forgiveness , and when to apply
A borrower can apply for forgiveness only after all loan proceeds for which the borrower wants forgiveness have been used. Borrowers can request forgiveness at any point up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 months of the end date of the loan are able to receive payment from their PPP lender.