The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the most recent stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiven loans to help to deal with the effects of economic collapse from the coronavirus outbreak. It included a requirement for the SBA to issue streamlined forms within 24 days of the bill being signed into law to simplify the application process for forgiveness, along with conditions that aim to increase the number of loans from community banks, especially for minority-owned businesses that were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within the first 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms that were updated.”
First Draw PPP Conditions for loan forgiveness
5 Little Known Ways To Get Your Student Loans Forgiven – For eligible borrowers First Draw PPP loans are qualified to be forgiven. This applies if the loan disbursement occurs within an 8 to 24 week period.
- It’s the same for employee compensation and the.
- The proceeds from the loan may be used to pay expenses for payroll or other eligible expenses.
- At least 60% of profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24-week time period after the loan’s disbursement
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exact same way.
- The loan proceeds are spent on payroll expenses and other eligible expenses; and
- A minimum of 60% of the profits go towards expenses for payroll
- When and how do I apply for loan forgiveness
When all of the loan proceeds have been used the borrower is eligible to be granted forgiveness. Borrowers may apply for forgiveness at any time until the loan’s maturity date. If the borrower does not apply for forgiveness within 10 months after the end of the period covered, then PPP loans are no longer deferred and the borrower will be required to make payment to their PPP lender.