Eligible Schools For Loan Forgiveness

Eligible Schools For Loan Forgiveness

The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for the forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms that conform to the requirements of the latest stimulus legislation. 

Congress approved the COVID-19 relief plan last month and provided $284 billion of funding for small-scale businesses who needed loans. The funds were used to mitigate the economic effects of the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 days after the legislation was adopted to make the process of applying for forgiveness, along with conditions meant to encourage more bank loans by community banks, specifically for minority-owned businesses who had trouble getting loans in the past.

Eligible Schools For Loan Forgiveness

“The Small Business Administration met the requirement to issue the one-page form for PPP loan forgiveness by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published new forms that were updated.”

Forgiveness terms in the initial draw of PPP loans

Eligible Schools For Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans can be eligible to be forgiven. This applies if the loan disbursement occurs within an 8 to 24 week period.

  • Employee and compensation levels are kept at a constant level.
  • The loan proceeds are used on payroll expenses and other expenses that are eligible and
  • Minimum 60% of proceeds go to the cost of payroll

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans given to borrowers who are eligible can be granted complete loan forgiveness, if within the 8to 24-week covered period following loan disbursement:

  • The First Draw PPP loan requires that the employee and the compensation levels be maintained in the identical manner.
  • The loan proceeds are used on payroll as well as other eligible expenses and
  • A minimum of 60% of the funds go to the cost of payroll
  • How do I apply for loan forgiveness , and when

A borrower may apply for forgiveness after the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers are able to apply for forgiveness at any time prior to the maturity date of the loan. If they do not file for forgiveness within 10 months of the last day of the covered period, then PPP loans are no longer deferred, and the borrower will be required to make monthly payments to their PPP lender.

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