The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month and offered $284 billion in funding to small businesses that needed loans. This money was used to mitigate the economic effects of the coronavirus pandemic. The law 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 banks in the community to lend more specifically to minority-owned companies who were unable to obtain loans in the past.
“The Small Business Administration met the requirement to issue the one page form for loan forgiveness under the PPP within 24 hours of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published the updated forms.”
First Draw PPP Loan forgiveness terms
Teacher Loan Forgiveness Form For Specific Loans – For those who qualify, First Draw PPP loans are suitable for loan forgiveness. This happens when the loan is disbursed within an 8 to 24 week period.
- The same goes for the employee compensation and the.
- The proceeds from the loan may be used to cover expenses for payroll or other eligible expenses.
- At least 60% of the profits are used for the cost of payroll
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible customers are qualified for loan forgiveness if the loan is paid within an 8to 24-week time frame.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exactly the same manner.
- The loan proceeds are used on payroll expenses as well as other eligible expenses and
- At least 60% of proceeds are used for the cost of payroll
- How to apply for loan forgiveness and when to apply
Once all of the loan’s proceeds have been used The borrower may apply to be granted forgiveness. Borrowers can apply for forgiveness at any time prior to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 years of the date of expiration of the period covered and the loan is not renewed, PPP loans are not deferred any longer, and borrowers will begin making payment to their PPP lender.