Illinois Institute Of Art Chicago Loan Forgiveness

The U.S. Small Business Administration released a one-page form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms to comply with the most recent stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March and included $284 billion of financing for small-scale businesses who needed loans. The money was intended to reduce the economic burden of the coronavirus epidemic. The legislation required that the SBA provide simplified forms within 24 hours of the signing into law. This was to simplify the process of applying for forgiveness. The legislation also contained conditions to encourage community banks to make more loans specifically to minority-owned companies who had a difficult time getting loans last year.

Illinois Institute Of Art Chicago Loan Forgiveness

“The Small Business Administration met the requirement to issue the one page form for loan forgiveness under the PPP by 24 days after the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued more updated forms.”

First Draw PPP Conditions for loan forgiveness

Illinois Institute Of Art Chicago Loan Forgiveness – For eligible borrowers First Draw PPP loans are qualified to be forgiven. This applies when the loan is disbursed within an 8 to 24-week period.

  • The levels of compensation and employee pay are kept at a constant level.
  • The loan proceeds can be used to pay the cost of payroll as well as other eligible expenses.
  • At least 60% of the profits are spent on payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans to eligible customers are eligible for loan forgiveness when the loan is paid within an 8 24 week period.

  • The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exact same way.
  • The loan funds are used on payroll costs as well as other eligible expenses and
  • A minimum of 60% of the profits go towards expenses for payroll
  • How and when to apply for loan forgiveness?

A borrower can apply for forgiveness once all loan proceeds to which the borrower wants forgiveness have been used. Borrowers may apply for forgiveness at any time until the date at which the loan matures. Borrowers who don’t request forgiveness within 10 month after the date they will be able to repay the loan are able to receive payment from their PPP lender.

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