The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms to meet the requirements of the latest stimulus legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. The legislation required that the SBA issue simplified forms within the first 24 hours after the bill’s passage into law. This was to make it easier to apply for forgiveness. Additionally, it included conditions that encourage community banks to make more loans specifically to minority-owned companies who had a difficult time getting loans last year.
“The Small Business Administration met the requirement to issue the one page form for PPP loan forgiveness within 24 days 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 updated forms.”
First Draw PPP Terms of loan forgiveness
Does Student Loan Forgiveness Include Parent Plus Loans – For eligible borrowers First Draw PPP loans can be eligible for loan forgiveness. This is when the loan is disbursed within an 8– to 24-week period.
- This is also true for employee compensation and the.
- The proceeds from the loan may be used to cover expenses for payroll or other eligible expenses.
- A minimum of 60% of the profits are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if during the 8to 24 week covered period following the loan’s disbursement
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exact same way.
- The loan proceeds are used on payroll and other expenses that are eligible and
- At least 60% of the profits are spent on payroll costs
- How to apply for loan forgiveness , and the time to apply
The borrower is eligible for forgiveness only after all loan proceeds to which the borrower has applied for forgiveness have been used. The borrower can apply for forgiveness at any time until the date of maturity. If the borrower does not apply for forgiveness within 10 months of the last day of the time period that was covered the PPP loan payments can not deferred any longer, and the borrower will be required to make payment to their PPP lender.
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