The U.S. Small Business Administration issued a one-page application form that aims to simplify the application process to forgive Paycheck Protection Program loans, as well as newly updated and revised forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgiven loans to help cope with the economic fallout from the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within the first 24 hours after the legislation was adopted to make the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more bank loans by community banks, particularly for minority-owned businesses that had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within the first 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 published new forms.”
First Draw PPP Loan forgiveness terms
Student Loan Forgivness Scam – For eligible borrowers, First Draw PPP loans can be qualified to be forgiven. This is when the loan payment is made within an 8 to 24-week period.
- This is also true for pay and benefits for employees.
- The loan proceeds can be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of proceeds are used for the cost of payroll
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans to qualified borrowers can be eligible for loan forgiveness when the loan is repaid within an 8– to 24-week period.
- Employee and compensation levels are maintained in the same way in accordance with the First Draw PPP loan
- The loan funds could be used to pay for expenses for payroll or other eligible expenses.
- A minimum of 60% of the proceeds go to payroll costs
- How do I apply for loan forgiveness , and when
After all loan proceeds have been used, a borrower can apply to be forgiven. Borrowers can request forgiveness at any time until the date of maturity. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan are able to receive the loan payment from their PPP lender.