The U.S. Small Business Administration has released a single-page form that aims to simplify the process of applying for the forgiveness of Paycheck Protection Program loans, together with revised and updated forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgiven loans to help deal with the financial fallout of the coronavirus epidemic. The law requires that the SBA release simplified forms within the first 24 hours of the signing into law. This is to make it easier to apply for forgiveness. Additionally, it included conditions that encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans in the past.
“The Small Business Administration met the requirement to issue the one page form for PPP loan forgiveness by 24 days after the date of the 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 released updated forms.”
Forgiveness terms in the first draw of PPP loans
Text Message About Student Loan Forgiveness – First Draw PPP loans made to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so during the 8- to 24 week period that follows the disbursement of loan:
- Pay and worker levels are kept at a constant level.
- The loan funds are used on payroll as well as other expenses eligible for reimbursement; and
- A minimum of 60% of the proceeds are used to pay for payroll expenses
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
- Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan
- The loan funds could be used to cover expenses for payroll or other expenses that are eligible.
- A minimum of 60% of the profits are used for the cost of payroll
- How and when to apply for loan forgiveness?
After all loan’s proceeds have been used The borrower may apply for forgiveness. Borrowers may apply for forgiveness at any time up to the date of maturity. Borrowers who do not request forgiveness within 10 months of the expiration date of the loan are able to receive payment from their PPP lender.
Download Text Message About Student Loan Forgiveness
Gallery of Text Message About Student Loan Forgiveness
