The U.S. Small Business Administration released a one-page form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to conform to the requirements of the latest stimulus legislation.
The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgiven loans to help deal with the financial fallout of the coronavirus epidemic. The legislation required that the SBA release simplified forms within 24 hours of the legislation’s signing into law. This was to make it easier to apply for forgiveness. Additionally, it included conditions to encourage community banks to make more loans specifically to minority-owned companies that had difficulty getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs wrote that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued new forms that were updated.”
First Draw PPP Conditions for loan forgiveness
What Jobs Qualify For Student Loan Forgiveness – For eligible borrowers, First Draw PPP loans can be qualified for loan forgiveness. This happens if the loan disbursement occurs within an 8 to 24 week period.
- The same goes for the compensation and employees.
- The proceeds of the loan can be used to pay the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the funds go to the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24 week duration following the loan’s disbursement
- Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
- The loan funds can be used to pay expenses for payroll or other expenses that are eligible.
- At least 60% of profits are used for the cost of payroll
- How do I apply for loan forgiveness , and when to apply
When all of the loan funds have been utilized The borrower may apply to be forgiven. Borrowers may apply for forgiveness at any point up to the date at which the loan matures. If borrowers do not apply for forgiveness within 10 months of the date of expiration of the period covered, then PPP loan payments can not deferred any longer, and borrowers must make loan payments to their PPP lender.