The U.S. Small Business Administration released a one-page form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiven loans to help cope with the economic fallout from the coronavirus outbreak. The law requires that the SBA release simplified forms within 24 hours of the legislation’s signing into law. This was done to facilitate the application for forgiveness. It also included conditions to encourage banks in the community to lend more particularly to minority-owned businesses that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 days from the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released the updated forms.”
Forgiveness terms in the first draw of PPP loans
Student Loan Forgiveness Texas – First Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if during the 8- to 24 week period that follows the disbursement of loan:
- This is also true for compensation and employees.
- The loan proceeds are used on payroll and other expenses that are eligible and
- A minimum of 60% of the funds go to payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who are eligible can be granted complete loan forgiveness, if within the 8– to 24-week duration following the loan’s disbursement
- Pay and worker levels are kept in the same way in accordance with the First Draw PPP loan
- The loan funds could be used to pay expenses for payroll or other eligible expenses.
- At least 60% of the profits are used for the cost of payroll
- When and how do I apply for loan forgiveness
Once all of the loan funds have been utilized The borrower may apply to be granted forgiveness. Borrowers can apply for forgiveness at any time prior until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 months of the date of expiration of the covered period the PPP loans are no longer deferred and the borrower will be required to make loan payments to their PPP lender.