The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process to forgive Paycheck Protection Program loans, together with updated and revised forms that conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgivable loans to help them deal with the financial fallout from the coronavirus outbreak. The law required that the SBA provide simplified forms within the first 24 hours of the signing into law. This was to make it easier to apply for forgiveness. Additionally, it included conditions to encourage community banks to lend more particularly to minority-owned businesses who had a difficult time getting loans in the past.
“The Small Business Administration met the requirement of releasing the one page form for loan forgiveness under the PPP within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released the updated forms.”
First Draw PPP Terms of loan forgiveness
Http Studentaid Ed Gov Repay Loans Forgiveness Cancellation – For borrowers who are eligible First Draw PPP loans are qualified to forgive loans. This happens if the loan disbursement occurs within an 8– to 24 week period.
- The same goes for the compensation and employees.
- The loan proceeds are spent on payroll and other eligible expenses; and
- At least 60% of the 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 if the loan is paid within an 8– 24-week period.
- Employee and compensation levels are maintained in the same way in accordance with the First Draw PPP loan
- The loan proceeds are used on payroll and other expenses that are eligible and
- A minimum of 60% of the proceeds are used for the cost of payroll
- When and how do I apply for loan forgiveness?
A borrower may apply for forgiveness only after the loan’s proceeds for which the borrower wants forgiveness have been utilized. The borrower can request forgiveness at any time prior to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the period covered and the loan is not renewed, PPP loan payments are not deferred any longer, and borrowers must make payment to their PPP lender.