The U.S. Small Business Administration has released a single-page form that aims to simplify the process of applying for forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms that comply with the latest stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them deal with the financial fallout from the coronavirus pandemic. It also included a requirement that the SBA to issue simplified forms within 24 hours after the legislation was approved by the lawmaker to streamline the procedure of applying for forgiveness, along with conditions that aim to increase the number of loans from community banks, particularly for minority-owned businesses that struggled to get loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within the first 24 hours of the date of enactment under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released additional updated forms.”
First Draw PPP Terms of loan forgiveness
Wells Fargo Student Loan Forgiveness – For borrowers who are eligible First Draw PPP loans can be qualified to forgive loans. This happens when the loan payment is made within an 8 to 24-week period.
- It’s the same for employee compensation and the.
- The loan funds are used on payroll costs as well as other expenses eligible for reimbursement; and
- At least 60% of funds go to payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8to 24-week duration following loan payment:
- The levels of compensation and employee pay are kept in the same way as required for the First Draw PPP loan
- The proceeds of the loan can be used to pay for payroll costs or other eligible expenses.
- A minimum of 60% of the profits are spent on payroll costs
- How do I apply for loan forgiveness and when
A borrower may apply for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been used. Borrowers can request forgiveness at any time up to the date at which the loan matures. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the period covered the PPP loan payments are no longer deferred and borrowers must make payment to their PPP lender.