The U.S. Small Business Administration has released a single-page form aimed at simplifying the application process for the forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms to comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month, which offered $284 billion in funding to small businesses in need of loans. The money was intended to mitigate the economic effects of the coronavirus outbreak. It included a requirement for the SBA to issue streamlined forms within the first 24 hours after the legislation was approved by the lawmaker to streamline the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, particularly for minority-owned companies that were unable to obtain 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 form for PPP loan forgiveness within the first 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released additional updated forms.”
First Draw PPP Conditions for loan forgiveness
Teacher Loan Forgiveness Form Navient – For borrowers who are eligible, First Draw PPP loans are suitable to be forgiven. This is if the loan disbursement occurs within an 8– to 24-week period.
- This is also true for employee compensation and the.
- The loan proceeds are spent on payroll expenses and other eligible expenses; and
- A minimum of 60% of profits are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8– to 24-week duration following loan disbursement:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exact same way.
- The loan proceeds are used on payroll costs as well as other eligible expenses and
- A minimum of 60% of the proceeds go to expenses for payroll
- When and how do I apply for loan forgiveness?
Once all of the loan proceeds have been used the borrower is eligible to be forgiven. Borrowers can apply for forgiveness at any time prior to the maturity date of the loan. If they do not file for forgiveness within 10 months after the last day of the covered period, then PPP loans are not deferred any longer, and the borrower will be required to make payment to their PPP lender.