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 that are in line with the latest stimulus law.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion of financing for small-scale businesses looking for forgivable loans to help them cope with the economic fallout of the coronavirus epidemic. The package also mandated the SBA to issue streamlined forms within 24 days after the legislation was approved by the lawmaker to streamline the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, especially for minority-owned businesses who had trouble getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 days 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 new forms.”
First Draw PPP Conditions for loan forgiveness
Complete Loan Forgiveness For Teachers – First Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if within the 8-to 24-week period after the loan’s disbursement
- Pay and worker levels are kept at a constant level.
- The loan proceeds can be used to pay expenses for payroll or other expenses that are eligible.
- At least 60% of funds go to payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness if they do so during the 8to 24 week time period after loan disbursement:
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an identical manner.
- The loan proceeds can be used to pay payroll costs or other eligible expenses.
- Minimum 60% of profits go towards expenses for payroll
- How do I apply for loan forgiveness and when
Once all of the loan proceeds have been used The borrower may apply for forgiveness. Borrowers can request forgiveness at any time until the loan’s maturity date. If they do not file for forgiveness within 10 years of the last day of the time period that was covered, then PPP loan payments can no longer deferred and borrowers will begin making payment to their PPP lender.