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, together with updated and revised forms to comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief package in the month of March and provided $284 billion of funding to small businesses in need of loans. The money was intended to mitigate the economic effects of the coronavirus epidemic. The law requires that the SBA issue simplified forms within the first 24 hours of the signing into law. This was done to simplify the process of applying for forgiveness. Additionally, it included conditions that would encourage banks in the community to lend more, especially to minority-owned businesses who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms.”
First Draw PPP Terms of loan forgiveness
Texas Teacher Loan Forgiveness 2022 – For borrowers who are eligible, First Draw PPP loans are suitable to forgive loans. This applies when the loan payment is made within an 8– to 24-week timeframe.
- This is also true for compensation and employees.
- The loan proceeds are used on payroll expenses as well as other expenses eligible for reimbursement; and
- Minimum 60% of funds go to payroll costs
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 time period after the loan’s disbursement
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the exact same way.
- The loan proceeds are used on payroll and other eligible expenses; and
- Minimum 60% of funds go to the cost of payroll
- When and how do I apply for loan forgiveness?
The borrower is eligible for forgiveness once the loan’s proceeds for which the borrower wants forgiveness have been used. Borrowers may apply for forgiveness at any time up to the date of maturity. If the borrower does not apply for forgiveness within 10 months after the last day of the period covered and the loan is not renewed, PPP loan payments are not deferred any longer, and the borrower will be required to make loan payments to their PPP lender.