Is There A Deadline To Apply For Ppp Loan Forgiveness

The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, together with updated and revised forms that conform to the requirements of the most recent stimulus legislation. 

Congress approved the COVID-19 relief package last month and provided $284 billion of funding for small-scale businesses who needed loans. This money was used to mitigate the economic effects of the coronavirus outbreak. It also included a requirement that the SBA to issue simplified forms within 24 hours of the bill being adopted to make the procedure of applying for forgiveness, along with conditions meant to encourage more bank loans by community banks, particularly for minority-owned companies that struggled to get loans in the past.

Is There A Deadline To Apply For Ppp Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within 24 hours of the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released more updated forms.”

First Draw PPP Terms of loan forgiveness

Is There A Deadline To Apply For Ppp Loan Forgiveness – For eligible borrowers First Draw PPP loans can be suitable for loan forgiveness. This is when the loan payment is made within an 8 to 24 week period.

  • Employee and compensation levels are maintained
  • The loan proceeds are spent on payroll costs as well as other expenses eligible for reimbursement; and
  • A minimum of 60% of proceeds are used to pay for payroll expenses

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans for eligible borrowers are qualified for loan forgiveness if 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 an exactly the same manner.
  • The proceeds of the loan could be used to cover payroll costs or other expenses that are eligible.
  • A minimum of 60% of proceeds are used for the cost of payroll
  • How to apply for loan forgiveness and the time to apply

When all of the loan funds have been utilized, a borrower can apply to be forgiven. Borrowers can apply for forgiveness at any time prior until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 month after the date they will be able to repay the loan are eligible to receive loan payments from their PPP lender.

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