The U.S. Small Business Administration has released a 1-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the latest stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of financing for small-scale businesses looking for forgiven loans to help cope with the economic fallout from the coronavirus outbreak. The package also mandated the SBA to issue streamlined forms within the first 24 hours of the bill being signed into law to simplify the application process for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, specifically for minority-owned businesses that had trouble getting loans in the past.
“The Small Business Administration met the requirement to issue the one page form for the forgiveness of PPP loans within 24 days of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued more updated forms.”
First Draw PPP Conditions for loan forgiveness
Teacher Loan Forgiveness Kansas – For those who qualify, First Draw PPP loans are eligible for loan forgiveness. This is when the loan is disbursed within an 8– to 24-week timeframe.
- The levels of compensation and employee pay are kept at a constant level.
- The proceeds of the loan can be used to cover payroll costs or other expenses that are eligible.
- A minimum of 60% of the funds go to payroll costs
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans made to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8to 24-week duration following the loan’s disbursement
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exact same way.
- The loan funds can be used to pay expenses for payroll or other eligible expenses.
- A minimum of 60% of the funds go to expenses for payroll
- When and how do I apply for loan forgiveness?
Once all of the loan’s proceeds have been used The borrower may apply for forgiveness. The borrower can request forgiveness anytime up until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 months after the date they will be able to repay the loan will be able to receive payment from their PPP lender.