How To Sign Up For Public Service Loan Forgiveness

How To Sign Up For Public Service Loan Forgiveness

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. The form also contains newly updated forms that are in line with the latest stimulus legislation. 

The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion in funding for small businesses seeking forgiveness loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. It included a requirement for the SBA to issue streamlined forms within 24 hours after the legislation was approved by the lawmaker to streamline the procedure of applying for forgiveness. The legislation also contained conditions that aim to increase the number of loans from community banks, particularly for minority-owned companies that had trouble getting loans in the past.

How To Sign Up For Public Service Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the PPP form, which is one page long, for loan forgiveness within the first 24 hours of 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 published new forms that were updated.”

First Draw PPP Loan forgiveness terms

How To Sign Up For Public Service Loan Forgiveness – For those who qualify First Draw PPP loans are eligible to be forgiven. This happens when the loan is disbursed within an 8 to 24 week period.

  • Pay and worker levels are maintained
  • The loan proceeds can be used to cover payroll costs or other expenses that are eligible.
  • Minimum 60% of proceeds go to the cost of payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans made to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24 week duration following loan disbursement:

  • The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
  • The loan funds are used on payroll and other eligible expenses; and
  • At least 60% of the proceeds are used to pay for payroll expenses
  • What is the best time to apply for loan forgiveness?

When all of the loan proceeds have been used The borrower may apply to be forgiven. Borrowers are able to apply for forgiveness at any time prior to the maturity date of the loan. 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.

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