The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the most recent stimulus law.
Congress approved the COVID-19 relief package in the month of March that included $284 billion of financing to small businesses that needed loans. The money was intended to offset the economic impact of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 days after the legislation was signed into law to simplify the process of applying for forgiveness, along with conditions designed to facilitate more loans from community banks, particularly for minority-owned businesses 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 issue the one-page form for PPP loan forgiveness within 24 hours from 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 published more updated forms.”
First Draw PPP Conditions for loan forgiveness
Cvs Student Loan Forgiveness – First Draw PPP loans made to borrowers who meet the criteria are eligible for total loan forgiveness within the 8-to 24 week period that follows the disbursement of loan:
- This is also true for compensation and employees.
- The loan funds are used on payroll costs and other expenses that are eligible and
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans given to borrowers who are eligible can be granted complete loan forgiveness, if within the 8– to 24-week duration following loan payment:
- The levels of compensation and employee pay are kept in the same way as is required for the First Draw PPP loan
- The loan funds are used on payroll expenses and other expenses that are eligible and
- At least 60% of the proceeds are used for the cost of payroll
- What is the best time to apply for loan forgiveness?
A borrower can apply for forgiveness after all loan proceeds to which the borrower has applied for forgiveness have been used. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 months of the last day of the period covered the PPP loan payments are not deferred any longer, and the borrower will be required to make payment to their PPP lender.