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 current stimulus law.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgivable loans to help them cope with the economic fallout from the coronavirus outbreak. The legislation required that the SBA issue simplified forms within the first 24 hours after the bill’s passage into law. This is to facilitate the application for forgiveness. Additionally, it included conditions to encourage community banks to make more loans particularly to minority-owned businesses who had a difficult time getting loans last year.
“The Small Business Administration met the requirements to release the single-page form for the forgiveness of PPP loans within 24 hours of the date of the 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 more updated forms.”
First Draw PPP Loan forgiveness terms
Teacher Loan Forgiveness Form 2014 – First Draw PPP loans granted to eligible borrowers qualify for complete loan forgiveness if they do so within the 8-to 24-week period after the disbursement of loan:
- The same goes for the employee compensation and the.
- The loan proceeds are used on payroll costs as well as other expenses eligible for reimbursement; and
- A minimum of 60% of the proceeds go to the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness, if within the 8– to 24-week duration following loan payment:
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exact same way.
- The loan proceeds are used on payroll and other expenses that are eligible and
- A minimum of 60% of the proceeds are spent on payroll costs
- How do I apply for loan forgiveness , and the time to apply
A borrower may apply for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been used. Borrowers can request forgiveness at any time until the date at which the loan matures. Borrowers who do not request forgiveness within 10 months of the end date of the loan are able to receive payment from their PPP lender.