The U.S. Small Business Administration has issued a one-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the current stimulus law.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus pandemic. The law required that the SBA release simplified forms within the first 24 hours of the legislation’s signing into law. This is to make it easier to apply for forgiveness. The legislation also contained conditions to encourage community banks to make more loans specifically to minority-owned companies who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 days from the date of enactment under the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released the updated forms.”
First Draw PPP Terms of loan forgiveness
Fsa Loan Forgiveness Program – For eligible borrowers, First Draw PPP loans can be eligible to forgive loans. This is if the loan disbursement occurs within an 8– to 24 week period.
- It’s the same for compensation and employees.
- The loan proceeds are used on payroll and other expenses that are eligible and
- At least 60% of the profits are spent on payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans to qualified customers are qualified for loan forgiveness when the loan is repaid within an 8to 24-week period.
- The levels of compensation and employee pay are kept in the same way in accordance with the First Draw PPP loan
- The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
- At least 60% of the proceeds are spent on payroll costs
- How to apply for loan forgiveness and when to apply
When all of the loan’s proceeds have been used The borrower may apply to be granted forgiveness. The borrower can request forgiveness any time up to the maturity date of the loan. Borrowers who don’t request forgiveness within 10 month after the date they will be able to repay the loan are eligible to receive the loan payment from their PPP lender.