The U.S. Small Business Administration has released a 1-page form that simplifies the application for forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that comply with the current stimulus legislation.
Congress approved the COVID-19 relief package in the month of March and included $284 billion of financing to small businesses in need of loans. The funds were used to mitigate the economic effects of the coronavirus pandemic. It also included a requirement that the SBA to issue simplified forms within 24 hours of the bill being adopted to make the application process for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, especially for minority-owned businesses who had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within the first 24 hours 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 released updated forms.”
First Draw PPP Loan forgiveness terms
Would Student Loan Forgiveness Include Private Loans – For those who qualify, First Draw PPP loans can be suitable to be forgiven. This happens if the loan disbursement occurs within an 8– to 24-week timeframe.
- It’s the same for pay and benefits for employees.
- The proceeds of the loan can be used to cover expenses for payroll or other expenses that are eligible.
- At least 60% of the proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if during the 8– to 24-week time period after the loan’s disbursement
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an identical manner.
- The loan funds are used on payroll and other eligible expenses; and
- At least 60% of funds go to the cost of payroll
- How do I apply for loan forgiveness and when
A borrower may apply for forgiveness only after all loan proceeds to which the borrower is requesting forgiveness have been used. The borrower can request forgiveness any time up to the maturity date of the loan. Borrowers who don’t request forgiveness within 10 months after the date they will be able to repay the loan are able to receive payment from their PPP lender.