The U.S. Small Business Administration has released a form of one page which makes it simpler to request forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the latest stimulus legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgiveness loans to help them cope with the economic fallout from the coronavirus outbreak. The package also mandated the SBA to issue streamlined forms within 24 hours of the legislation being adopted to make the procedure of applying for forgiveness, along with conditions designed to facilitate more loans from community banks, particularly for minority-owned businesses who struggled to get loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to issue the PPP form, which is one page long, for 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 issued the updated forms.”
First Draw PPP Loan forgiveness terms
Taxes On Student Loan Forgiveness – First Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if within the 8-to 24 week period that follows loan disbursement:
- This is also true for employee compensation and the.
- The loan proceeds are spent on payroll costs as well as other expenses eligible for reimbursement; and
- A minimum of 60% of the funds go to the cost of payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans for eligible customers are qualified for loan forgiveness if the loan is paid 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 payroll costs or other eligible expenses.
- Minimum 60% of proceeds go to expenses for payroll
- How do I apply for loan forgiveness , and the time to apply
A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers may apply for forgiveness at any time until the date at which the loan matures. If they do not file for forgiveness within 10 months after the end of the covered period the PPP loan payments are not deferred any longer, and borrowers must make monthly payments to their PPP lender.