The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process to forgive Paycheck Protection Program loans, as well as newly updated and revised forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March, which included $284 billion of financing for small-scale businesses who needed loans. The money was intended to offset the economic impact of the coronavirus pandemic. It included a requirement for the SBA to issue simplified forms within 24 days after the legislation was approved by the lawmaker to streamline the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, specifically for minority-owned businesses that had trouble getting loans last year.
“The Small Business Administration met the requirements to release the one page form for loan forgiveness under the PPP by 24 days after the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published updated forms.”
First Draw PPP Terms of loan forgiveness
Who Do I Contact About Student Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans are suitable for loan forgiveness. This happens when the loan is disbursed within an 8– to 24-week period.
- Pay and worker levels are ensured
- The loan proceeds are spent on payroll costs and other expenses that are eligible and
- At least 60% of profits are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans to qualified borrowers are qualified for loan forgiveness when the loan is paid within an 8– 24-week period.
- The levels of compensation and employee pay are maintained in the same way in accordance with the First Draw PPP loan
- The loan proceeds are spent on payroll expenses and other expenses that are eligible and
- A minimum of 60% of proceeds are used to pay for payroll expenses
- How do I apply for loan forgiveness , and the time to apply
After all loan funds have been utilized, a borrower can apply to be granted forgiveness. Borrowers can apply for forgiveness any time up until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 months of the expiration date of the loan are able to receive loan payments from their PPP lender.