The U.S. Small Business Administration released a one-page form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, together with revised and updated forms to comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief package last month and included $284 billion of financing for small-scale businesses who needed loans. The funds were used to mitigate the economic effects of the coronavirus epidemic. It included a requirement for the SBA to issue streamlined forms within 24 days after the legislation was adopted to make the application process for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, particularly for minority-owned businesses that 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 requirement to publish the one-page form for PPP loan forgiveness within 24 hours from the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued additional updated forms.”
Terms for forgiveness for the first draw of PPP loans
Get On Your Feet Loan Forgiveness Ny – For borrowers who are eligible, First Draw PPP loans can be qualified for loan forgiveness. This applies when the loan payment is made within an 8 to 24 week period.
- The levels of compensation and employee pay are maintained
- The proceeds of the loan can be used to cover the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of proceeds are used for the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans for eligible borrowers can be eligible for loan repayment when the loan is paid within an 8– 24 week time frame.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the exact same way.
- The loan proceeds are spent on payroll as well as other eligible expenses and
- At least 60% of proceeds go to payroll costs
- How do I apply for loan forgiveness and when to apply
After all loan funds have been utilized The borrower may apply for forgiveness. The borrower can request forgiveness anytime up to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 years of the end of the time period that was covered, then PPP loans are not deferred any longer, and the borrower will be required to make payment to their PPP lender.
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