2nd Ppp Loan Forgiveness

2nd Ppp Loan Forgiveness

The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, together with updated and revised forms that meet the requirements of the latest stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. The package also mandated the SBA to issue simplified forms within the first 24 hours of the legislation being signed into law to simplify the application process for forgiveness. The legislation also contained conditions that aim to increase the number of bank loans by community banks, especially for minority-owned businesses who were unable to obtain loans last year.

2nd Ppp Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within 24 hours from the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms.”

Forgiveness terms for the initial draw of PPP loans

2nd Ppp Loan Forgiveness – First Draw PPP loans granted to eligible borrowers qualify for complete loan forgiveness if they do so during the 8- to 24 week period that follows the disbursement of loan:

  • Pay and worker levels are maintained
  • The proceeds of the loan can be used to pay for expenses for payroll or other expenses that are eligible.
  • A minimum of 60% of profits are used to pay for payroll expenses

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans made to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24-week duration following loan disbursement:

  • The First Draw PPP loan requires that the compensation and employee levels be maintained in an exact same way.
  • The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
  • A minimum of 60% of the profits are used to pay for payroll expenses
  • When and how do I apply for loan forgiveness?

A borrower may apply for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers are able to apply for forgiveness anytime up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 years of the last day of the covered period and the loan is not renewed, PPP loans are not deferred any longer, and borrowers must make loan payments to their PPP lender.

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