The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the current stimulus law.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. The legislation required that the SBA issue simplified forms within 24 hours of the legislation’s signing into law. This was to simplify the process of applying for forgiveness. The legislation also contained conditions that encourage banks in the community to lend more specifically to minority-owned companies that had difficulty getting loans in the past.
“The Small Business Administration met the requirements to release the one page form for loan forgiveness under the PPP within 24 hours 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 published additional updated forms.”
First Draw PPP Terms of loan forgiveness
Loan Forgiveness For Former Students Of Itt – For eligible borrowers, First Draw PPP loans can be qualified to be forgiven. This happens when the loan is disbursed within an 8– to 24-week period.
- Pay and worker levels are maintained
- The loan funds are used on payroll costs as well as other expenses eligible for reimbursement; and
- A minimum of 60% of the funds go to payroll costs
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans granted to borrowers who are eligible can be granted total loan forgiveness if they do so during the 8– to 24-week covered period following the loan’s disbursement
- Employee and compensation levels are kept in the same way in accordance with the First Draw PPP loan
- The loan funds are used on payroll expenses and other expenses that are eligible and
- Minimum 60% of profits go towards the cost of payroll
- How do I request loan forgiveness and the time to apply
After all loan funds have been utilized the borrower is eligible to be granted forgiveness. Borrowers may apply for forgiveness at any time up to the date at which the loan matures. Borrowers who do not request forgiveness within 10 month after the date they will be able to repay the loan will be able to receive payment from their PPP lender.