The U.S. Small Business Administration has released a 1-page form that simplifies the application for the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the current stimulus law.
Congress approved the COVID-19 relief package in the month of March, which offered $284 billion in funding to small businesses that needed loans. The money was intended to reduce the economic burden of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 hours after the legislation was signed into law to simplify the procedure of applying for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, especially for minority-owned businesses who struggled to get loans in the past.
“The Small Business Administration met the requirement to issue the one-page form for PPP loan forgiveness by 24 days after 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 more updated forms.”
First Draw PPP Loan forgiveness terms
Federal Loan Forgiveness Social Work – For those who qualify, First Draw PPP loans can be eligible to forgive loans. This happens when the loan is disbursed within an 8– to 24-week timeframe.
- 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 expenses that are eligible.
- At least 60% of the profits are spent on payroll costs
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to eligible borrowers are eligible for loan repayment when the loan is paid within an 8to 24-week period.
- Pay and worker levels are kept in the same way in accordance with the First Draw PPP loan
- The loan proceeds are spent on payroll as well as other eligible expenses and
- At least 60% of the proceeds are used to pay for payroll expenses
- How to request loan forgiveness and when to apply
After all loan funds have been utilized The borrower may apply to be granted forgiveness. The borrower can apply for forgiveness at any time up to the date at which the loan matures. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan will be able to receive the loan payment from their PPP lender.