The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the most recent stimulus law.
The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. It included a requirement for the SBA to issue streamlined forms within 24 hours of the legislation being approved by the lawmaker to streamline the process of applying for forgiveness, along with conditions designed to facilitate more bank loans by community banks, especially for minority-owned businesses who 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 requirement to issue the one-page PPP form loan forgiveness within 24 hours from the date of enactment in 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 updated forms.”
First Draw PPP Terms of loan forgiveness
Biden Student Loans Forgiveness – For borrowers who are eligible First Draw PPP loans are suitable for loan forgiveness. This is when the loan payment is made within an 8– to 24 week period.
- Pay and worker levels are kept at a constant level.
- The loan proceeds can be used to pay for expenses for payroll or other eligible expenses.
- At least 60% of the profits are used for the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans for eligible customers are eligible for loan forgiveness when the loan is repaid within an 8to 24-week period.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exact same way.
- The loan funds are used on payroll as well as other eligible expenses and
- At least 60% of profits are used to pay for payroll expenses
- How do I request loan forgiveness and the time to apply
Once all of the loan’s proceeds have been used The borrower may apply to be granted forgiveness. The borrower can apply for forgiveness at any point up to the date at which the loan matures. Borrowers who don’t request forgiveness within 10 months after the date they will be able to repay the loan are able to receive loan payments from their PPP lender.