The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process for forgiveness of Paycheck Protection Program loans, together with revised and updated forms to comply with the most recent stimulus legislation.
The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion of funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus pandemic. The law required that the SBA release simplified forms within 24 hours of the signing into law. This was done to make it easier to apply for forgiveness. It also included conditions that would encourage community banks to make more loans particularly to minority-owned businesses that had difficulty getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 days of the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued additional updated forms.”
First Draw PPP Terms of loan forgiveness
What Are The Chances Of Student Loan Forgiveness – First Draw PPP loans made to borrowers who meet the criteria are eligible for total loan forgiveness during the 8- to 24-week covered period following the loan’s disbursement
- Pay and worker levels are kept at a constant level.
- The loan proceeds are used on payroll costs and other eligible expenses; and
- A minimum of 60% of proceeds are used for the cost of payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans for eligible borrowers can be eligible for loan forgiveness if the loan is paid within an 8– 24-week time frame.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exactly the same manner.
- The loan funds could be used to cover payroll costs or other expenses that are eligible.
- A minimum of 60% of the profits are used for the cost of payroll
- When and how do I apply for loan forgiveness
When all of the loan funds have been utilized, a borrower can apply for forgiveness. Borrowers may apply for forgiveness at any point up to the loan’s maturity date. Borrowers who don’t request forgiveness within 10 month after the date they will be able to repay the loan will be able to receive the loan payment from their PPP lender.