The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the most recent stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 days of the bill being signed into law to simplify the procedure of applying for forgiveness. It also included conditions designed to facilitate more bank loans by community banks, particularly for minority-owned businesses that were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 days of the date of enactment under the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released updated forms.”
First Draw PPP Terms of loan forgiveness
Fms Student Loan Forgiveness – For eligible borrowers, First Draw PPP loans are eligible to forgive loans. This happens if the loan disbursement occurs within an 8 to 24-week timeframe.
- The same goes for the pay and benefits for employees.
- The loan proceeds are used on payroll and other expenses that are eligible and
- At least 60% of profits go towards payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24-week duration following the loan’s disbursement
- The levels of compensation and employee pay are maintained in the same manner as is required for the First Draw PPP loan
- The loan funds could be used to cover the cost of payroll as well as other eligible expenses.
- At least 60% of funds go to payroll costs
- How do I request loan forgiveness and the time to apply
After all loan funds have been utilized, a borrower can apply to be forgiven. The borrower can apply for forgiveness at any point up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 months of the date of expiration of the period covered the PPP loans are not deferred any longer, and borrowers must make monthly payments to their PPP lender.
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