The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the current stimulus legislation.
Congress approved the COVID-19 relief package last month that provided $284 billion of funding to small businesses in need of loans. This money was used to offset the economic impact of the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 hours of the bill being adopted to make the process of applying for forgiveness, along with conditions meant to encourage more loans from community banks, particularly for minority-owned businesses who struggled to get loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs 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 published new forms.”
First Draw PPP Terms of loan forgiveness
Are Eidl Loans Forgivable – First Draw PPP loans made to borrowers who are eligible can be granted total loan forgiveness within the 8 to 24 week period that follows the disbursement of loan:
- Employee and compensation levels are ensured
- The loan proceeds are used on payroll as well as other expenses eligible for reimbursement; and
- At least 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans made to borrowers who are eligible can be granted full loan forgiveness if during the 8– to 24-week duration following loan payment:
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exact same way.
- The loan proceeds are used on payroll costs and other eligible expenses; and
- At least 60% of proceeds are used for the cost of payroll
- How to apply for loan forgiveness and the time to apply
A borrower may apply for forgiveness once the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers can apply for forgiveness at any time prior to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months of the end of the period covered the PPP loan payments can not deferred any longer, and borrowers must make payment to their PPP lender.
Download Are Eidl Loans Forgivable
Gallery of Are Eidl Loans Forgivable
