The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying 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 that included $284 billion of financing for small-scale businesses who needed loans. This money was used to offset the economic impact of the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 hours after the legislation was signed into law to simplify the application process for forgiveness, along with conditions designed to facilitate more bank loans by community banks, specifically for minority-owned businesses that were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within 24 days 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 released the updated forms.”
First Draw PPP Terms of loan forgiveness
Walden Student Loan Forgiveness – First Draw PPP loans given to borrowers who are eligible can be granted complete loan forgiveness if they do so during the 8- to 24 week period that follows loan disbursement:
- Employee and compensation levels are kept at a constant level.
- The loan proceeds are used on payroll and other expenses that are eligible and
- A minimum of 60% of the profits go towards expenses for payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to eligible customers are qualified for loan forgiveness when the loan is paid within an 8– to 24-week time frame.
- The levels of compensation and employee pay are maintained in the same manner in accordance with the First Draw PPP loan
- The loan funds can be used to pay for payroll costs or other eligible expenses.
- A minimum of 60% of the funds go to the cost of payroll
- How do I apply for loan forgiveness , and when to apply
When all of the loan’s proceeds have been used, a borrower can apply to be forgiven. Borrowers may apply for forgiveness at any time until the loan’s maturity date. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the period covered, then PPP loans are no longer deferred and the borrower will be required to make loan payments to their PPP lender.