Federal Loan Forgiveness Program For Doctors

The U.S. Small Business Administration has released a form of one page that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms to comply with the most recent stimulus legislation. 

Congress approved the COVID-19 relief plan last month, which included $284 billion of financing to small businesses that needed loans. The money was intended to reduce the economic burden of the coronavirus pandemic. It included a requirement for the SBA to issue simplified forms within 24 days of the bill being signed into law to simplify the application process for forgiveness. It also included conditions meant to encourage more loans from community banks, particularly for minority-owned companies that had trouble getting loans in the past.

Federal Loan Forgiveness Program For Doctors

“The Small Business Administration met the requirement of releasing the one-page form for PPP loan forgiveness within 24 hours of the date of enactment 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 released the updated forms.”

Forgiveness terms for the initial draw of PPP loans

Federal Loan Forgiveness Program For Doctors – For borrowers who are eligible First Draw PPP loans can be suitable for loan forgiveness. This is when the loan is disbursed within an 8 to 24-week timeframe.

  • Employee and compensation levels are ensured
  • The loan funds are used on payroll as well as other expenses eligible for reimbursement; and
  • A minimum of 60% of the profits are used to pay for payroll expenses

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to qualified customers are eligible for loan forgiveness when the loan is repaid within an 8– to 24 week time frame.

  • 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 costs and other expenses that are eligible and
  • A minimum of 60% of the profits go towards the cost of payroll
  • How and when to apply for loan forgiveness

After all loan funds have been utilized, a borrower can apply for forgiveness. The borrower can request forgiveness any time up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 months of the end date of the loan are eligible to receive the loan payment from their PPP lender.

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