The U.S. Small Business Administration has issued a one-page form that simplifies the application for the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the latest stimulus law.
The COVID-19 aid package Congress passed 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 included a requirement for the SBA to issue simplified forms within the first 24 hours of the bill being approved by the lawmaker to streamline the procedure of applying for forgiveness. It also included conditions that aim to increase the number of bank loans by community banks, especially for minority-owned businesses that struggled to get loans last year.
“The Small Business Administration met the requirement to issue the one-page form for the forgiveness of PPP loans within 24 hours of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published more updated forms.”
First Draw PPP Conditions for loan forgiveness
Did Obama Forgive Student Loans For Disabled Vets – For borrowers who are eligible First Draw PPP loans are eligible to forgive loans. This happens when the loan is disbursed within an 8 to 24-week period.
- It’s the same for employee compensation and the.
- The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
- At least 60% of the profits are used for the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans given 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 the compensation levels be maintained in the exact same way.
- The loan proceeds are spent on payroll costs and other expenses that are eligible and
- A minimum of 60% of profits are spent on payroll costs
- When and how do I apply for loan forgiveness
The borrower is eligible for forgiveness only after all loan proceeds to which the borrower has applied for forgiveness have been utilized. Borrowers can apply for forgiveness anytime up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the period covered the PPP loans are no longer deferred, and borrowers will begin making loan payments to their PPP lender.