The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the latest stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion in financing for small-scale businesses looking for forgiveness loans to help them deal with the financial fallout from the coronavirus pandemic. The legislation required that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This was done to simplify the process of applying for forgiveness. It also included conditions that would encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within 24 days of 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 released updated forms.”
Forgiveness terms in the first draw of PPP loans
Teacher Loan Forgiveness Form – First Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness during the 8- to 24-week period after the loan’s disbursement
- Employee and compensation levels are kept at a constant level.
- The loan proceeds can be used to pay payroll costs or other expenses that are eligible.
- Minimum 60% of profits go towards the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to qualified customers are eligible for loan forgiveness if the loan is paid within an 8to 24-week period.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exactly the same manner.
- The loan proceeds are used on payroll as well as other eligible expenses and
- 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 proceeds have been used The borrower may apply to be forgiven. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 months of the last day of the covered period and the loan is not renewed, PPP loan payments are no longer deferred and the borrower will be required to make loan payments to their PPP lender.
Download Teacher Loan Forgiveness Form
Gallery of Teacher Loan Forgiveness Form
