The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, together with updated and revised forms that conform to the requirements of the latest 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 cope with the economic fallout from the coronavirus pandemic. The law required that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This was to simplify the process of applying for forgiveness. It also included conditions to encourage community banks to make more loans particularly to minority-owned businesses that had difficulty getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs wrote that the Small Business Administration fulfilled the requirement to issue the PPP form, which is one page long, for loan forgiveness within 24 days of the date of enactment under the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued more updated forms.”
First Draw PPP Conditions for loan forgiveness
Bc Loan Forgiveness Nursing – First Draw PPP loans given to eligible borrowers qualify for total loan forgiveness during the 8- to 24-week period after loan disbursement:
- It’s the same for employee compensation and the.
- The proceeds of the loan can be used to pay payroll costs or other eligible expenses.
- At least 60% of proceeds are spent on payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to qualified borrowers can be eligible for loan repayment when the loan is paid within an 8– 24 week period.
- Pay and worker levels are kept in the same way as required for the First Draw PPP loan
- The proceeds of the loan could be used to pay for the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the funds go to expenses for payroll
- When and how do I apply for loan forgiveness?
When all of the loan funds have been utilized The borrower may apply to be forgiven. Borrowers are able to apply for forgiveness at any time prior to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the end of the time period that was covered, then PPP loan payments can no longer deferred, and the borrower will be required to make payment to their PPP lender.