The U.S. Small Business Administration has issued a one-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the most recent stimulus law.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion in funding for small businesses seeking forgiven loans to help to deal with the effects of economic collapse from the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 days of the legislation being adopted to make the application process for forgiveness. It also included conditions meant to encourage more bank loans by community banks, particularly for minority-owned businesses that had trouble getting loans in the past.
“The Small Business Administration met the requirement of releasing the one page form for loan forgiveness under the PPP by 24 days after 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 updated forms.”
First Draw PPP Loan forgiveness terms
Total Permanent Disability Loan Forgiveness – For eligible borrowers, First Draw PPP loans can be eligible to forgive loans. This applies when the loan payment is made within an 8 to 24 week period.
- This is also true for pay and benefits for employees.
- The proceeds of the loan can be used to pay the cost of payroll as well as other expenses that are eligible.
- Minimum 60% of funds go to expenses for payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans made to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24-week duration following loan payment:
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the exact same way.
- The proceeds of the loan could be used to pay the cost of payroll as well as other eligible expenses.
- A minimum of 60% of the proceeds are spent on payroll costs
- How and when to apply for loan forgiveness?
A borrower can apply for forgiveness once all loan proceeds to which the borrower wants forgiveness have been utilized. Borrowers may apply for forgiveness at any point up to the loan’s maturity date. Borrowers who don’t request forgiveness within 10 month of the expiration date of the loan are eligible to receive loan payments from their PPP lender.
Download Total Permanent Disability Loan Forgiveness
Gallery of Total Permanent Disability Loan Forgiveness
