The U.S. Small Business Administration released a one-page form designed to make it easier for applicants to complete the application process for the forgiveness of Paycheck Protection Program loans, together with updated and revised forms that meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March that provided $284 billion of funding to small businesses in need of loans. This money was used to reduce the economic burden of the coronavirus outbreak. The legislation required that the SBA release simplified forms within the first 24 hours after the bill’s passage into law. This is to facilitate the application for forgiveness. It also included conditions that encourage banks in the community to lend more specifically to minority-owned companies who had a difficult time getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 hours from the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms.”
First Draw PPP Loan forgiveness terms
Us Military Student Loan Forgiveness – For borrowers who are eligible First Draw PPP loans can be qualified to forgive loans. This applies when the loan is disbursed within an 8 to 24-week period.
- The same goes for the pay and benefits for employees.
- The loan proceeds are spent on payroll costs and other eligible expenses; and
- A minimum of 60% of the proceeds go to expenses for payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans for eligible borrowers can be eligible for loan repayment when the loan is paid within an 8– to 24 week period.
- The levels of compensation and employee pay are maintained in the same way as is required for the First Draw PPP loan
- The loan proceeds can be used to cover the cost of payroll as well as other eligible expenses.
- Minimum 60% of proceeds go to expenses for payroll
- What is the best time to apply for loan forgiveness?
When all of the loan proceeds have been used the borrower is eligible for forgiveness. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 month of the end date of the loan will be able to receive the loan payment from their PPP lender.
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