The U.S. Small Business Administration has issued a one-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the most recent stimulus law.
Congress approved the COVID-19 relief plan last month and offered $284 billion in funding to small businesses that needed loans. The funds were used to offset the economic impact of the coronavirus outbreak. The package also mandated the SBA to issue simplified forms within 24 days of the bill being approved by the lawmaker to streamline the process of applying for forgiveness. It also included conditions designed to facilitate more loans from community banks, particularly for minority-owned companies that had trouble getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the PPP form, which is one page long, for loan forgiveness within 24 days of 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 additional updated forms.”
First Draw PPP Conditions for loan forgiveness
Are Student Loans Forgiven If You Die – For those who qualify First Draw PPP loans can be suitable for loan forgiveness. This is when the loan is disbursed within an 8– to 24-week period.
- The same goes for the compensation and employees.
- The proceeds from the loan may be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of the profits are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to eligible customers are qualified for loan forgiveness when the loan is repaid within an 8– to 24-week period.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an identical manner.
- The loan proceeds are used on payroll as well as other eligible expenses and
- At least 60% of the profits are used for the cost of payroll
- How to apply for loan forgiveness and when to apply
The borrower is eligible for forgiveness after all loan proceeds to which the borrower has applied for forgiveness have been utilized. The borrower can request forgiveness at any time prior until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 months of the end date of the loan are able to receive payment from their PPP lender.