The U.S. Small Business Administration has released a 1-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that comply with the latest stimulus law.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgiveness loans to help them cope with the economic fallout from the coronavirus pandemic. The legislation required that the SBA issue simplified forms within the first 24 hours of the legislation’s signing into law. This was to make it easier to apply for forgiveness. Additionally, it included conditions to encourage community banks to lend more, especially to minority-owned businesses who had a difficult time getting loans last year.
“The Small Business Administration met the requirement of releasing the one-page form for the forgiveness of PPP loans within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued the updated forms.”
First Draw PPP Loan forgiveness terms
Forms For Doctor To Request Forgiveness Of Federal Student Loans – For eligible borrowers, First Draw PPP loans can be suitable to be forgiven. This applies when the loan payment is made within an 8 to 24-week timeframe.
- The same goes for the compensation and employees.
- The loan funds are used on payroll expenses and other eligible expenses; and
- At least 60% of proceeds go to 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 8– to 24-week time period after the loan’s disbursement
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exactly the same manner.
- The loan funds can be used to pay for payroll costs or other expenses that are eligible.
- At least 60% of profits are used for the cost of payroll
- How to request loan forgiveness and when to apply
Once all of the loan proceeds have been used The borrower may apply for forgiveness. Borrowers can request forgiveness at any time until the loan’s maturity date. Borrowers who don’t request forgiveness within 10 months of the end date of the loan are able to receive the loan payment from their PPP lender.