The U.S. Small Business Administration issued a one-page application form that aims to simplify the application process to forgive Paycheck Protection Program loans, along with newly updated and revised forms that meet the requirements of the latest stimulus legislation.
The COVID-19 aid package 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 from the coronavirus outbreak. The law required that the SBA release simplified forms within 24 hours after the bill’s passage into law. This was to facilitate the application for forgiveness. Additionally, it included conditions that encourage community banks to make more loans particularly to minority-owned businesses who had a difficult time getting loans in the past.
“The Small Business Administration met the requirement of releasing the one page form for PPP loan forgiveness within 24 hours of the date of enactment 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 new forms that were updated.”
Forgiveness terms in the initial draw of PPP loans
Loan Forgiveness For Medical Assistants – For borrowers who are eligible, First Draw PPP loans are suitable to forgive loans. This is when the loan is disbursed within an 8 to 24-week period.
- It’s the same for 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 proceeds are spent on payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to qualified customers are eligible for loan forgiveness if the loan is paid within an 8to 24-week time frame.
- The First Draw PPP loan requires that the compensation and employee levels be maintained in the identical manner.
- The loan proceeds are spent on payroll as well as other eligible expenses and
- Minimum 60% of funds go to payroll costs
- How to apply for loan forgiveness , and when
Once all of the loan funds have been utilized The borrower may apply to be granted forgiveness. Borrowers may apply for forgiveness at any point up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making payment to their PPP lender.
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Gallery of Loan Forgiveness For Medical Assistants
