The U.S. Small Business Administration has released a form of one page that simplifies the application for forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the current stimulus law.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgiveness loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. The legislation required that the SBA issue simplified forms within 24 hours of the signing into law. This was done to facilitate the application for forgiveness. It also included conditions that would encourage community banks to make more loans, especially to minority-owned businesses who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote 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 published more updated forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness Teachers Form – First Draw PPP loans made to borrowers who meet the criteria are eligible for full loan forgiveness if within the 8-to 24-week covered period following loan disbursement:
- Employee and compensation levels are kept at a constant level.
- The loan funds are used on payroll as well as other expenses eligible for reimbursement; and
- At least 60% of profits go towards the cost of payroll
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans to eligible customers are qualified for loan forgiveness when the loan is repaid within an 8to 24 week period.
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the exact same way.
- The loan proceeds are spent on payroll as well as other eligible expenses and
- A minimum of 60% of profits are used for the cost of payroll
- How do I apply for loan forgiveness , and when to apply
A borrower may apply for forgiveness after the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers may apply for forgiveness at any time until the date at which the loan matures. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan will be able to receive payment from their PPP lender.