The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process for the forgiveness of Paycheck Protection Program loans, together with updated and revised forms that meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March, which offered $284 billion in funding for small-scale businesses who needed loans. This money was used to offset the economic impact of the coronavirus pandemic. The law requires that the SBA release simplified forms within 24 hours after the bill’s passage into law. This is to facilitate the application for forgiveness. The legislation also contained conditions that encourage community banks to make more loans specifically to minority-owned companies who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 days from the date of enactment in the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released additional updated forms.”
Terms for forgiveness for the first draw of PPP loans
Is There A Student Loan Forgiveness Program – For borrowers who are eligible First Draw PPP loans can be eligible to be forgiven. This happens when the loan payment is made within an 8 to 24-week timeframe.
- This is also true for employee compensation and the.
- The loan funds are used on payroll and other expenses that are eligible and
- A minimum of 60% of profits are used to pay for payroll expenses
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible customers are eligible for loan repayment when the loan is repaid within an 8to 24 week time frame.
- Pay and worker levels are maintained in the same way in accordance with the First Draw PPP loan
- The loan funds can be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of the profits go towards payroll costs
- How do I apply for loan forgiveness , and the time to apply
After all loan proceeds have been used the borrower is eligible for forgiveness. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. Borrowers who do not request forgiveness within 10 month of the end date of the loan are eligible to receive loan payments from their PPP lender.
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