The U.S. Small Business Administration has issued a one-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the latest stimulus law.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. The legislation required that the SBA issue simplified forms within the first 24 hours of the signing into law. This is to simplify the process of applying for forgiveness. Additionally, it included conditions to encourage banks in the community to lend more particularly to minority-owned businesses that had difficulty getting loans last year.
“The Small Business Administration met the requirement of releasing 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 with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued more updated forms.”
Terms for forgiveness for the initial draw of PPP loans
Student Loan Forgiveness Scam Text – For borrowers who are eligible, First Draw PPP loans can be eligible to forgive loans. This applies when the loan is disbursed within an 8 to 24-week period.
- It’s the same for compensation and employees.
- The loan funds are used on payroll and other expenses that are eligible and
- A minimum of 60% of proceeds are used for the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to eligible borrowers are qualified for loan forgiveness if the loan is paid within an 8– to 24-week time frame.
- Employee and compensation levels are kept in the same way in accordance with the First Draw PPP loan
- The loan proceeds are used on payroll as well as other eligible expenses and
- At least 60% of the proceeds are used for the cost of payroll
- How do I apply for loan forgiveness and the time to apply
The borrower is eligible for forgiveness once all loan proceeds to which the borrower is requesting forgiveness have been used. The borrower can request forgiveness any time up until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 years of the date of expiration of the covered period and the loan is not renewed, PPP loan payments can not deferred any longer, and the borrower will be required to make loan payments to their PPP lender.