The U.S. Small Business Administration has released a form of one page that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that comply with the current stimulus legislation.
Congress approved the COVID-19 relief package last month, which provided $284 billion of funding for small-scale businesses who needed loans. The funds were used to reduce the economic burden of the coronavirus pandemic. It also included a requirement that the SBA to issue streamlined forms within 24 days of the legislation being approved by the lawmaker to streamline the procedure of applying for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, especially for minority-owned companies that were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within 24 days from the date of enactment under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued new forms that were updated.”
Terms for forgiveness for the first draw of PPP loans
Student Loan Forgiveness Qualifications – First Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness within the 8-to 24-week covered period following loan disbursement:
- Pay and worker levels are maintained
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- At least 60% of proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans granted to borrowers who are eligible can be granted total loan forgiveness if they do so during the 8– to 24-week covered period following the loan’s disbursement
- The First Draw PPP loan requires that the compensation and employee levels be maintained in the exactly the same manner.
- The loan proceeds can be used to pay for expenses for payroll or other expenses that are eligible.
- At least 60% of the proceeds are used for the cost of payroll
- What is the best time to apply for loan forgiveness
A borrower may apply for forgiveness only after the loan’s proceeds for which the borrower has applied for forgiveness have been used. Borrowers can apply for forgiveness at any time prior until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 months of the expiration date of the loan will be able to receive loan payments from their PPP lender.
Download Student Loan Forgiveness Qualifications
Gallery of Student Loan Forgiveness Qualifications
