The U.S. Small Business Administration has released a form of one page which makes it simpler to request the cancellation of Paycheck Protection Program loans. It also includes newly revised forms to comply with the current stimulus law.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion in funds for small businesses that want forgiven loans to help cope with the economic fallout of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 hours after the legislation was signed into law to simplify the process of applying for forgiveness. It also included conditions that aim to increase the number of loans from community banks, especially for minority-owned companies that struggled to get loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within the first 24 hours from the date of enactment under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued updated forms.”
Terms for forgiveness for the initial draw of PPP loans
Career Point College Loan Forgiveness – First Draw PPP loans given to eligible borrowers qualify for total loan forgiveness within the 8 to 24 week period that follows the loan’s disbursement
- Employee and compensation levels are ensured
- The loan proceeds can be used to pay for payroll costs or other expenses that are eligible.
- A minimum of 60% of the funds go to payroll costs
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 8– to 24-week duration following loan payment:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exact same way.
- The proceeds of the loan could be used to pay for payroll costs or other eligible expenses.
- Minimum 60% of profits go towards expenses for payroll
- How and when to apply for loan forgiveness
When all of the loan’s proceeds have been used, a borrower can apply for forgiveness. The borrower can request forgiveness at any time prior to the maturity date of the loan. Borrowers who don’t request forgiveness within 10 month of the end date of the loan will be able to receive loan payments from their PPP lender.
Download Career Point College Loan Forgiveness
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