The U.S. Small Business Administration has released a form of one page which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the current stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. The legislation required that the SBA release simplified forms within the first 24 hours after the bill’s passage into law. This is to simplify the process of applying for forgiveness. The legislation also contained conditions that encourage community banks to lend more, especially to minority-owned businesses that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within the first 24 hours from the date of enactment under 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 new forms that were updated.”
Forgiveness terms in the initial draw of PPP loans
4 Loan Forgiveness Programs For Teachers – For eligible borrowers First Draw PPP loans can be suitable to be forgiven. This applies when the loan is disbursed within an 8– to 24-week period.
- The same goes for the compensation and employees.
- The loan proceeds are spent on payroll as well as other expenses eligible for reimbursement; and
- At least 60% of proceeds are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible borrowers are eligible for loan repayment when the loan is paid within an 8– to 24 week period.
- Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
- The proceeds of the loan can be used to pay for the cost of payroll as well as other eligible expenses.
- A minimum of 60% of proceeds are spent on payroll costs
- How and when to apply for loan forgiveness
A borrower may apply for forgiveness only after all loan proceeds to which the borrower is requesting forgiveness have been used. The borrower can apply for forgiveness at any time up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 years of the end of the period covered, then PPP loan payments are not deferred any longer, and borrowers will begin making loan payments to their PPP lender.
Download 4 Loan Forgiveness Programs For Teachers
Gallery of 4 Loan Forgiveness Programs For Teachers
