Loan Forgiveness For Non Profit Employees

Loan Forgiveness For Non Profit Employees

The U.S. Small Business Administration has issued a one-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the latest stimulus law. 

The COVID-19 relief package that Congress passed last month revived 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 pandemic. It included a requirement for the SBA to issue simplified forms within 24 days of the bill being adopted to make the process of applying for forgiveness, along with conditions meant to encourage more bank loans by community banks, specifically for minority-owned businesses who struggled to get loans last year.

Loan Forgiveness For Non Profit Employees

“The Small Business Administration met the requirements to release the one-page form for the forgiveness of PPP loans 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 published updated forms.”

Forgiveness terms in the first draw of PPP loans

Loan Forgiveness For Non Profit Employees – For those who qualify First Draw PPP loans are suitable 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 are used on payroll and other expenses that are eligible and
  • Minimum 60% of proceeds go to the cost of payroll

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans made to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8to 24-week duration following the loan’s disbursement

  • Pay and worker levels are kept in the same way as is required for the First Draw PPP loan
  • The loan proceeds can be used to cover the cost of payroll as well as other eligible expenses.
  • A minimum of 60% of the profits go towards the cost of payroll
  • When and how do I apply for loan forgiveness

A borrower can apply for forgiveness once the loan’s proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 month of the expiration date of the loan are able to receive the loan payment from their PPP lender.

Download Loan Forgiveness For Non Profit Employees

Gallery of Loan Forgiveness For Non Profit Employees


Leave a Reply

Your email address will not be published.