The U.S. Small Business Administration has issued a one-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the most recent stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiven loans to help deal with the financial fallout from the coronavirus pandemic. The package also mandated the SBA to issue simplified forms within 24 hours after the legislation was approved by the lawmaker to streamline the application process for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, especially for minority-owned businesses that were unable to obtain loans in the past.
“The Small Business Administration met the requirements to release the single-page form for PPP loan forgiveness within 24 hours of the date of enactment of 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 more updated forms.”
First Draw PPP Conditions for loan forgiveness
Who Do I Contact For Student Loan Forgiveness – First Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness within the 8 to 24 week period that follows the loan’s disbursement
- The same goes for the compensation and employees.
- The proceeds of the loan can be used to pay for the cost of payroll as well as other expenses that are eligible.
- At least 60% of the proceeds are used for the cost of payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans made to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24 week duration following loan disbursement:
- Pay and worker levels are maintained in the same way in accordance with the First Draw PPP loan
- The loan proceeds can be used to cover payroll costs or other expenses that are eligible.
- Minimum 60% of funds go to expenses for payroll
- When and how do I apply for loan forgiveness
The borrower is eligible for forgiveness after all loan proceeds to which the borrower is requesting forgiveness have been utilized. Borrowers can apply for forgiveness any time up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 months of the expiration date of the loan are able to receive payment from their PPP lender.