The U.S. Small Business Administration has released a 1-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March and included $284 billion of financing for small-scale businesses who needed loans. The funds were used to offset the economic impact of the coronavirus pandemic. The law requires that the SBA provide simplified forms within 24 hours of the legislation’s signing into law. This was to facilitate the application for forgiveness. Additionally, it included conditions to encourage banks in the community to lend more, especially to minority-owned businesses who had a difficult time getting loans last year.
“The Small Business Administration met the requirement of releasing the one-page form for PPP loan forgiveness within 24 days of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released the updated forms.”
Terms for forgiveness for the first draw of PPP loans
Students Born Before 1997 Loan Forgiveness – For those who qualify First Draw PPP loans are qualified for loan forgiveness. 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 proceeds from the loan may be used to pay payroll costs or other eligible expenses.
- At least 60% of profits go towards payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24 week covered period following loan disbursement:
- Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
- The loan proceeds could be used to cover the cost of payroll as well as other eligible expenses.
- A minimum of 60% of profits are used to pay for payroll expenses
- How do I request loan forgiveness and the time to apply
Once all of the loan funds have been utilized, a borrower can apply to be granted forgiveness. Borrowers can request forgiveness at any time up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 months of the date of expiration of the period covered and the loan is not renewed, PPP loan payments can no longer deferred and borrowers must make loan payments to their PPP lender.
Download Students Born Before 1997 Loan Forgiveness
Gallery of Students Born Before 1997 Loan Forgiveness
