The U.S. Small Business Administration has released a single-page form that aims to simplify the application process for forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms that meet the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief package in the month of March and included $284 billion of financing to small businesses in need of loans. The money was intended to reduce the economic burden of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 hours of the bill being approved by the lawmaker to streamline the process of applying for forgiveness. It also included conditions meant to encourage more loans from community banks, specifically for minority-owned businesses who had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 hours from the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued new forms.”
First Draw PPP Loan forgiveness terms
Can Student Loans Be Forgiven For Disability – For borrowers who are eligible, First Draw PPP loans can be qualified to be forgiven. This applies if the loan disbursement occurs within an 8– to 24-week period.
- It’s the same for employee compensation and the.
- The loan funds are used on payroll expenses and other eligible expenses; and
- At least 60% of profits go towards the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24-week duration following loan payment:
- Pay and worker levels are maintained in the same way in accordance with the First Draw PPP loan
- The loan proceeds could be used to pay payroll costs or other eligible expenses.
- At least 60% of profits are used for the cost of payroll
- How do I apply for loan forgiveness , and when
Once all of the loan proceeds have been used the borrower is eligible to be forgiven. Borrowers are able to apply for forgiveness at any time prior to the maturity date of the loan. Borrowers who don’t request forgiveness within 10 months after the date they will be able to repay the loan are able to receive the loan payment from their PPP lender.