The U.S. Small Business Administration has released a single-page form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, along with newly revised and updated forms to meet the requirements of the most recent stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help deal with the financial fallout from the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within the first 24 hours after the legislation was adopted to make the procedure of applying for forgiveness. It also included conditions designed to facilitate more loans from community banks, particularly for minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within 24 days of the date of enactment under the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued updated forms.”
First Draw PPP Loan forgiveness terms
Alberta Student Loan Forgiveness 2022 – For borrowers who are eligible First Draw PPP loans are suitable to forgive loans. This is if the loan disbursement occurs within an 8 to 24-week timeframe.
- The levels of compensation and employee pay are ensured
- The proceeds from the loan may be used to pay expenses for payroll or other expenses that are eligible.
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible customers are eligible for loan repayment if the loan is paid within an 8– 24-week period.
- The First Draw PPP loan requires that the employee and the compensation levels are maintained in the exact same way.
- The loan proceeds are used on payroll as well as other eligible expenses and
- A minimum of 60% of the profits are spent on payroll costs
- How and when to apply for loan forgiveness
The borrower is eligible for forgiveness once all loan proceeds to which the borrower has applied for forgiveness have been used. Borrowers are able to apply for forgiveness any time up to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 months after the end of the covered period, then PPP loan payments are no longer deferred and borrowers will begin making monthly payments to their PPP lender.