Who Signs A Public Service Loan Forgiveness Employment Certification Form

The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the latest stimulus legislation. 

The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiveness loans to help them cope with the economic fallout from the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 hours of the legislation being approved by the lawmaker to streamline the application process for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, particularly for minority-owned businesses who were unable to obtain loans last year.

Who Signs A Public Service Loan Forgiveness Employment Certification Form

“The Small Business Administration met the requirement of releasing the single-page form for loan forgiveness under the PPP by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published updated forms.”

Forgiveness terms for the first draw of PPP loans

Who Signs A Public Service Loan Forgiveness Employment Certification Form – First Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness if they do so within the 8-to 24-week period after the loan’s disbursement

  • The levels of compensation and employee pay are ensured
  • The loan proceeds are used on payroll as well as other expenses eligible for reimbursement; and
  • A minimum of 60% of the proceeds are used for the cost of payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to eligible customers are eligible for loan repayment when the loan is paid within an 8– to 24 week time frame.

  • The First Draw PPP loan requires that the compensation and employee levels be maintained in the exactly the same manner.
  • The proceeds of the loan could be used to cover expenses for payroll or other eligible expenses.
  • A minimum of 60% of the profits go towards the cost of payroll
  • How and when to apply for loan forgiveness

A borrower can apply for forgiveness only after all loan proceeds to which the borrower has applied for forgiveness have been utilized. The borrower can apply for forgiveness at any time until the loan’s maturity date. If borrowers do not apply for forgiveness within 10 years of the last day of the period covered, then PPP loan payments are no longer deferred, and borrowers must make payment to their PPP lender.

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