The U.S. Small Business Administration has issued a one-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. It also includes newly revised forms to comply with the most recent stimulus legislation.
The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion of funds for small businesses that want forgivable loans to help them cope with the economic fallout from the coronavirus pandemic. It also included a requirement that the SBA to issue simplified forms within 24 hours of the legislation being adopted to make the procedure of applying for forgiveness. It also included conditions designed to facilitate more loans from community banks, especially for minority-owned companies that were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within the first 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms.”
First Draw PPP Terms of loan forgiveness
Csun Student Loan Forgiveness – For those who qualify, First Draw PPP loans are qualified for loan forgiveness. This applies when the loan is disbursed within an 8– to 24-week period.
- This is also true for compensation and employees.
- The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
- At least 60% of proceeds go to the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to qualified borrowers are eligible for loan forgiveness when the loan is paid within an 8– to 24-week time frame.
- The levels of compensation and employee pay are maintained in the same way as required for the First Draw PPP loan
- The loan funds can be used to pay for the cost of payroll as well as other expenses that are eligible.
- At least 60% of proceeds are spent on payroll costs
- How to apply for loan forgiveness and when
A borrower may apply for forgiveness after all loan proceeds for which the borrower has applied for forgiveness have been utilized. The borrower can apply for forgiveness at any time up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 months of the end of the time period that was covered, then PPP loan payments are no longer deferred and borrowers will begin making monthly payments to their PPP lender.