The U.S. Small Business Administration has issued a one-page form that simplifies the application for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the most recent stimulus legislation.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion in funds for small businesses that want forgiven loans to help deal with the financial fallout from the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 days of the bill being adopted to make the application process for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, specifically for minority-owned companies that had trouble getting loans in the past.
“The Small Business Administration met the requirement of releasing the single-page form for PPP loan forgiveness within 24 days of the date of 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 issued new forms that were updated.”
First Draw PPP Terms of loan forgiveness
Latest News On Student Loan Forgiveness – For borrowers who are eligible First Draw PPP loans are eligible to be forgiven. This happens when the loan is disbursed within an 8– to 24-week period.
- The same goes for the pay and benefits for employees.
- The loan proceeds can be used to pay the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the profits go towards the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans to qualified borrowers can be qualified for loan forgiveness when the loan is paid within an 8– 24-week period.
- Employee and compensation levels are maintained in the same manner in accordance with the First Draw PPP loan
- The loan proceeds are spent on payroll costs and other eligible expenses; and
- Minimum 60% of proceeds go to payroll costs
- How do I apply for loan forgiveness , and when
When all of the loan proceeds have been used the borrower is eligible for forgiveness. 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 years of the last day of the covered period the PPP loan payments are no longer deferred, and borrowers must make loan payments to their PPP lender.