The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process to forgive Paycheck Protection Program loans, together with updated and revised forms to meet the requirements of the latest stimulus legislation.
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 cope with the economic fallout from the coronavirus pandemic. It also included a requirement that the SBA to issue simplified forms within 24 hours of the bill being approved by the lawmaker to streamline the procedure of applying for forgiveness. It also included conditions meant to encourage more bank loans by 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 publish the one-page PPP form loan forgiveness within 24 days from the date of enactment under 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 more updated forms.”
First Draw PPP Loan forgiveness terms
Teacher Loan Forgiveness Deferment Form – First Draw PPP loans made to borrowers who meet the criteria are eligible for total loan forgiveness during the 8- to 24 week period that follows loan disbursement:
- It’s the same for pay and benefits for employees.
- The loan funds are used on payroll and other expenses that are eligible and
- A minimum of 60% of the proceeds go to expenses for payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to qualified customers are qualified for loan forgiveness if the loan is paid within an 8– 24-week time frame.
- The First Draw PPP loan requires that the compensation and employee levels be maintained in an exactly the same manner.
- The loan proceeds can be used to pay for expenses for payroll or other eligible expenses.
- At least 60% of proceeds are spent on payroll costs
- When and how do I apply for loan forgiveness?
A borrower can apply for forgiveness once all loan proceeds to which the borrower is requesting forgiveness have been used. The borrower can request forgiveness at any time prior until the date of maturity of the loan. 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.