The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process to forgive Paycheck Protection Program loans, as well as newly revised and updated forms to comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month, which included $284 billion of financing to small businesses that needed loans. The money was intended to offset the economic impact of the coronavirus epidemic. The law requires that the SBA issue simplified forms within 24 hours of the signing into law. This was done to facilitate the application for forgiveness. Additionally, it included conditions to encourage banks in the community to lend more particularly to minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs wrote that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued new forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness Sallie Mae Disability – First Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness during the 8- to 24-week covered period following loan disbursement:
- Employee and compensation levels are kept at a constant level.
- The proceeds from the loan may be used to pay the cost of payroll as well as other eligible expenses.
- At least 60% of the proceeds are used for the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness, if within the 8to 24 week duration following the loan’s disbursement
- Pay and worker levels are maintained in the same way as is required for the First Draw PPP loan
- The loan proceeds are used on payroll costs and other eligible expenses; and
- A minimum of 60% of proceeds are used for the cost of payroll
- How and when to apply for loan forgiveness?
After all loan’s proceeds have been used the borrower is eligible to be forgiven. Borrowers may apply for forgiveness at any point up to the date at which the loan matures. Borrowers who don’t request forgiveness within 10 months of the end date of the loan will be able to receive loan payments from their PPP lender.