The U.S. Small Business Administration released a one-page form designed to make it easier for applicants to complete the application process to forgive Paycheck Protection Program loans, together with updated and revised forms to meet the requirements of the latest stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of financing for small-scale businesses looking for forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. The law required that the SBA provide simplified forms within 24 hours of the signing into law. This is to simplify the process of applying for forgiveness. It also included conditions that would encourage banks in the community to lend more, especially to minority-owned businesses who had a difficult time getting loans last year.
“The Small Business Administration met the requirement of releasing the single-page form for the forgiveness of PPP loans within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published new forms that were updated.”
First Draw PPP Terms of loan forgiveness
University Of Phoenix Student Loan Forgiveness – For borrowers who are eligible First Draw PPP loans can be eligible for loan forgiveness. This applies if the loan disbursement occurs within an 8 to 24-week period.
- Employee and compensation levels are ensured
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- Minimum 60% of profits go towards the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans granted to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24 week duration following loan disbursement:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the exact same way.
- The loan funds are used on payroll costs and other expenses that are eligible and
- A minimum of 60% of the funds go to payroll costs
- When and how do I apply for loan forgiveness
Once all of the loan proceeds have been used the borrower is eligible to be granted forgiveness. Borrowers can request forgiveness at any time up to the date at which the loan matures. Borrowers who do not request forgiveness within 10 month of the end date of the loan are eligible to receive loan payments from their PPP lender.