The U.S. Small Business Administration released a one-page form designed to make it easier for applicants to complete the application process to forgive Paycheck Protection Program loans, together with updated and revised forms to conform to the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month and provided $284 billion of funding for small-scale businesses who needed loans. The money was intended to reduce the economic burden of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 hours of the bill being signed into law to simplify the process of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, specifically for minority-owned businesses that had trouble getting loans in the past.
“The Small Business Administration met the requirement of releasing the one page form for the forgiveness of PPP loans within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released additional updated forms.”
First Draw PPP Terms of loan forgiveness
Aiu Online Student Loan Forgiveness – First Draw PPP loans granted to borrowers who are eligible can be granted total loan forgiveness within the 8-to 24 week period that follows the loan’s disbursement
- This is also true for employee compensation and the.
- The loan proceeds can be used to cover payroll costs or other expenses that are eligible.
- At least 60% of profits are used to pay for payroll expenses
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to qualified borrowers are eligible for loan repayment when the loan is repaid within an 8– to 24 week period.
- Employee and compensation levels are maintained in the same way as is required for the First Draw PPP loan
- The loan proceeds could be used to cover the cost of payroll as well as other expenses that are eligible.
- At least 60% of profits are used to pay for payroll expenses
- How do I apply for loan forgiveness , and when to apply
The borrower is eligible for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. The borrower can request forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the covered period, then PPP loans are not deferred any longer, and borrowers must make loan payments to their PPP lender.
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