The U.S. Small Business Administration has released a form of one page that simplifies the application for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the current stimulus legislation.
The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion of funds for small businesses that want forgivable loans to help them cope with the economic fallout of the coronavirus epidemic. It included a requirement for the SBA to issue simplified forms within the first 24 hours after the legislation was adopted to make the procedure of applying for forgiveness, along with conditions designed to facilitate more bank loans by community banks, especially for minority-owned businesses that were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within the first 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released more updated forms.”
Forgiveness terms for the first draw of PPP loans
Loan Forgiveness For Social Workers In Illinois – For those who qualify First Draw PPP loans can be qualified to be forgiven. This happens if the loan disbursement occurs within an 8 to 24-week timeframe.
- The levels of compensation and employee pay are kept at a constant level.
- The loan funds are used on payroll costs and other eligible expenses; and
- At least 60% of profits go towards payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans made to eligible borrowers qualify for total loan forgiveness if they do so during the 8– to 24-week duration following loan disbursement:
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exactly the same manner.
- The loan funds are used on payroll expenses as well as other eligible expenses and
- At least 60% of profits go towards expenses for payroll
- What is the best time to apply for loan forgiveness?
After all loan’s proceeds have been used The borrower may apply to be granted forgiveness. Borrowers can apply for forgiveness anytime up until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 month of the end date of the loan are able to receive payment from their PPP lender.