The U.S. Small Business Administration has issued a one-page form that simplifies the application for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the latest stimulus law.
Congress approved the COVID-19 relief package last month, which provided $284 billion of funding to small businesses that needed loans. This money was used to reduce the economic burden of the coronavirus epidemic. The package also mandated the SBA to issue streamlined forms within the first 24 hours after the legislation was approved by the lawmaker to streamline the process of applying for forgiveness. It also included conditions designed to facilitate more loans from community banks, particularly for minority-owned businesses that had trouble getting loans last year.
“The Small Business Administration met the requirement of releasing the one page form for PPP loan forgiveness by 24 days after the date of 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 issued new forms that were updated.”
First Draw PPP Loan forgiveness terms
Teacher Loan Forgiveness Program – First Draw PPP loans made to borrowers who are eligible can be granted total loan forgiveness during the 8- to 24-week period after the disbursement of loan:
- Pay and worker levels are ensured
- The loan proceeds are spent on payroll expenses and other expenses that are eligible and
- At least 60% of proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans made to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24-week duration following loan payment:
- Employee and compensation levels are maintained in the same way as is required for the First Draw PPP loan
- The loan proceeds can be used to pay for expenses for payroll or other eligible expenses.
- At least 60% of the proceeds are used to pay for payroll expenses
- How to apply for loan forgiveness and when
When all of the loan’s proceeds have been used the borrower is eligible for forgiveness. Borrowers are able to apply for forgiveness any time up until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 months of the end date of the loan will be able to receive payment from their PPP lender.
Download Teacher Loan Forgiveness Program
Gallery of Teacher Loan Forgiveness Program
