The U.S. Small Business Administration has issued a one-page form that simplifies the application for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms to comply with the latest stimulus legislation.
Congress approved the COVID-19 relief plan last month and included $284 billion of financing to small businesses in need of loans. The money was intended to offset the economic impact of the coronavirus outbreak. The legislation required that the SBA release simplified forms within 24 hours of the legislation’s signing into law. This was done to simplify the process of applying for forgiveness. It also included conditions that would encourage community banks to make more loans particularly to minority-owned businesses that had difficulty getting loans last year.
“The Small Business Administration met the requirement of releasing the single-page form for PPP loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published new forms that were updated.”
Forgiveness terms in the initial draw of PPP loans
Can You Have Student Loans Forgiven – First Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness during the 8- to 24-week period after the disbursement of loan:
- This is also true for employee compensation and the.
- The loan proceeds are spent on payroll and other expenses that are eligible and
- At least 60% of proceeds go to expenses for payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24 week duration following loan payment:
- The First Draw PPP loan requires that the compensation and employee levels be maintained in an identical manner.
- The loan proceeds are spent on payroll and other eligible expenses; and
- A minimum of 60% of the profits go towards expenses for payroll
- How do I apply for loan forgiveness , and the time to apply
Once all of the loan proceeds have been used, a borrower can apply for forgiveness. Borrowers can request forgiveness at any point up to the loan’s maturity date. If the borrower does not apply for forgiveness within 10 months after the date of expiration of the period covered the PPP loan payments can no longer deferred, and borrowers must make payment to their PPP lender.
Download Can You Have Student Loans Forgiven
Gallery of Can You Have Student Loans Forgiven
