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. The form is also updated with new forms that comply with the current stimulus legislation.
Congress approved the COVID-19 relief package last month and included $284 billion of financing for small-scale businesses who needed loans. The funds were used to reduce the economic burden of the coronavirus epidemic. It included a requirement for the SBA to issue streamlined forms within the first 24 hours of the bill being adopted to make the process of applying for forgiveness. The legislation also contained conditions that aim to increase the number of loans from community banks, particularly for minority-owned businesses who were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs wrote that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within 24 hours from the date of enactment under the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published updated forms.”
First Draw PPP Conditions for loan forgiveness
Do College Professors Qualify For Loan Forgiveness – First Draw PPP loans given to eligible borrowers qualify for total loan forgiveness within the 8-to 24-week covered period following the loan’s disbursement
- The levels of compensation and employee pay are kept at a constant level.
- The loan proceeds are used on payroll expenses as well as other expenses eligible for reimbursement; and
- A minimum of 60% of proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans for eligible borrowers can be eligible for loan forgiveness when the loan is repaid within an 8– 24-week time frame.
- Pay and worker levels are kept in the same way in accordance with the First Draw PPP loan
- The loan proceeds can be used to cover expenses for payroll or other eligible expenses.
- At least 60% of the profits are spent on payroll costs
- How to apply for loan forgiveness and the time to apply
Once all of the loan funds have been utilized the borrower is eligible for forgiveness. Borrowers can request forgiveness at any time until the date of maturity. Borrowers who don’t request forgiveness within 10 month after the date they will be able to repay the loan are eligible to receive loan payments from their PPP lender.
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