50 000 Loan Forgiveness

50 000 Loan Forgiveness

The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying for the forgiveness of Paycheck Protection Program loans, together with revised and updated forms to comply with the latest stimulus legislation. 

Congress approved the COVID-19 relief package last month that offered $284 billion in funding to small businesses in need of loans. This money was used to mitigate the economic effects of the coronavirus epidemic. The legislation required that the SBA release simplified forms within 24 hours of the legislation’s signing into law. This was to facilitate the application for forgiveness. Additionally, it included conditions that would encourage community banks to lend more specifically to minority-owned companies that had difficulty getting loans in the past.

50 000 Loan Forgiveness

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

First Draw PPP Conditions for loan forgiveness

50 000 Loan Forgiveness – First Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness during the 8- to 24 week period that follows the loan’s disbursement

  • Employee and compensation levels are kept at a constant level.
  • The loan proceeds are used on payroll expenses and other eligible expenses; and
  • Minimum 60% of funds go to payroll costs

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans given to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8to 24 week covered period following loan payment:

  • The levels of compensation and employee pay are maintained in the same way as 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 expenses that are eligible.
  • Minimum 60% of funds go to payroll costs
  • How do I request loan forgiveness and when

The borrower is eligible for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers can apply for forgiveness any time up to the maturity date of the loan. Borrowers who do not request forgiveness within 10 month of the expiration date of the loan are eligible to receive the loan payment from their PPP lender.

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