The U.S. Small Business Administration has released a single-page form aimed at simplifying the application process to forgive Paycheck Protection Program loans, along with newly revised and updated forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion in financing for small-scale businesses looking for forgiveness loans to help them cope with the economic fallout from the coronavirus outbreak. The law required that the SBA release simplified forms within 24 hours after the bill’s passage into law. This is to make it easier to apply for forgiveness. The legislation also contained conditions to encourage community banks to lend more particularly to minority-owned businesses who were unable to obtain loans last year.
“The Small Business Administration met the requirement to issue the single-page form for PPP loan forgiveness within 24 hours 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 the updated forms.”
First Draw PPP Conditions for loan forgiveness
Student Loan Forgiveness News Today – For borrowers who are eligible, First Draw PPP loans are suitable to be forgiven. This is if the loan disbursement occurs within an 8– to 24 week period.
- This is also true for pay and benefits for employees.
- The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
- Minimum 60% of profits go towards expenses for payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans for eligible customers are eligible for loan forgiveness if the loan is paid within an 8– 24-week period.
- The First Draw PPP loan requires that the employee and the compensation levels are maintained in the identical manner.
- The loan proceeds could be used to pay the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the proceeds are spent on payroll costs
- When and how do I apply for loan forgiveness
After all loan funds have been utilized the borrower is eligible for forgiveness. Borrowers are able to apply for forgiveness at any time prior to the maturity date of the loan. Borrowers who do not request forgiveness within 10 months of the end date of the loan are eligible to receive loan payments from their PPP lender.