The U.S. Small Business Administration released a one-page form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, as well as newly updated and revised forms to comply with the latest stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. The law requires that the SBA release simplified forms within the first 24 hours of the legislation’s signing into law. This was to facilitate the application for forgiveness. It also included conditions that would encourage community banks to lend more particularly to minority-owned businesses who were unable to obtain loans last year.
“The Small Business Administration met the requirements to release the one-page form for the forgiveness of PPP loans by 24 days after the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued more updated forms.”
First Draw PPP Conditions for loan forgiveness
Ways To Get Student Loans Forgiven – First Draw PPP loans given to eligible borrowers qualify for full loan forgiveness if within the 8-to 24 week period that follows the loan’s disbursement
- Employee and compensation levels are ensured
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- A minimum of 60% of the proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to qualified borrowers are eligible for loan repayment if the loan is paid within an 8– 24 week time frame.
- Employee and compensation levels are maintained in the same way as required for the First Draw PPP loan
- The loan funds could be used to cover expenses for payroll or other eligible expenses.
- At least 60% of funds go to payroll costs
- When and how do I apply for loan forgiveness
When all of the loan proceeds have been used The borrower may apply to be forgiven. Borrowers are able to apply for forgiveness any time up to the maturity date of the loan. 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.