The U.S. Small Business Administration has released a form of one page 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 most recent stimulus law.
The COVID-19 relief plan that Congress passed 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 from the coronavirus pandemic. It included a requirement for the SBA to issue simplified forms within 24 hours of the legislation being adopted to make the process of applying for forgiveness, along with conditions that aim to increase the number of loans from community banks, especially for minority-owned companies that were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 days of the date of enactment under the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released the updated forms.”
First Draw PPP Terms of loan forgiveness
Maine Student Loan Forgiveness – For eligible borrowers First Draw PPP loans are suitable to be forgiven. This is if the loan disbursement occurs within an 8 to 24 week period.
- The same goes for the employee compensation and the.
- The loan proceeds can be used to pay for the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24 week duration following the loan’s disbursement
- Pay and worker levels are maintained in the same way as is required for the First Draw PPP loan
- The loan funds can be used to cover payroll costs or other expenses that are eligible.
- At least 60% of profits go towards expenses for payroll
- How to apply for loan forgiveness and when
A borrower may apply for forgiveness only after the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers may apply for forgiveness at any time up to the date of maturity. Borrowers who don’t request forgiveness within 10 month of the end date of the loan are eligible to receive the loan payment from their PPP lender.