The U.S. Small Business Administration released a one-page form aimed at simplifying the application process for forgiveness of Paycheck Protection Program loans, together with revised and updated forms to conform to the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month and provided $284 billion of funding to small businesses that needed loans. This money was used to offset the economic impact of the coronavirus outbreak. It also included a requirement that the SBA to issue simplified forms within 24 days of the bill being adopted to make the procedure of applying for forgiveness, along with conditions meant to encourage more loans from community banks, specifically for minority-owned companies that were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within the first 24 hours of the date of enactment in the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published updated forms.”
First Draw PPP Loan forgiveness terms
Texas Teacher Loan Forgiveness Form – First Draw PPP loans given to eligible borrowers qualify for full loan forgiveness if within the 8 to 24-week period after the disbursement of loan:
- The same goes for the employee compensation and the.
- The proceeds from the loan may be used to pay for payroll costs or other expenses that are eligible.
- At least 60% of the profits are used for the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to eligible borrowers are qualified for loan forgiveness if the loan is paid within an 8to 24-week period.
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
- The loan funds are used on payroll and other expenses that are eligible and
- At least 60% of profits are used to pay for payroll expenses
- When and how do I apply for loan forgiveness?
A borrower may apply for forgiveness only after all loan proceeds for which the borrower wants forgiveness have been used. Borrowers may apply for forgiveness at any time up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 months of the date of expiration of the time period that was covered the PPP loan payments can no longer deferred and borrowers will begin making loan payments to their PPP lender.