The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms to meet the requirements of the latest stimulus legislation.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion in funding for small businesses seeking forgiven loans to help to deal with the effects of economic collapse from the coronavirus outbreak. The package also mandated the SBA to issue simplified forms within 24 days of the bill being adopted to make the application process for forgiveness, along with conditions designed to facilitate more bank loans by community banks, specifically for minority-owned companies that struggled to get loans last year.
“The Small Business Administration met the requirement of releasing the single-page form for the forgiveness of PPP loans within 24 days of the date of 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 the updated forms.”
First Draw PPP Terms of loan forgiveness
Canada Student Loan Forgiveness For Teachers – First Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness within the 8-to 24-week period after loan disbursement:
- It’s the same for employee compensation and the.
- The proceeds from the loan may be used to cover the cost of payroll as well as other eligible expenses.
- A minimum of 60% of proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans to qualified borrowers 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 are maintained in the exact same way.
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- At least 60% of profits go towards expenses for payroll
- How and when to apply for loan forgiveness?
A borrower may apply for forgiveness once all loan proceeds for which the borrower wants forgiveness have been utilized. Borrowers may apply for forgiveness at any time until the date of maturity. If borrowers do not apply for forgiveness within 10 years of the end of the covered period and the loan is not renewed, PPP loan payments are not deferred any longer, and borrowers will begin making payment to their PPP lender.
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