The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, together with updated and revised forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month and offered $284 billion in funding to small businesses in need of loans. The money was intended to reduce the economic burden of the coronavirus epidemic. It included a requirement for the SBA to issue streamlined forms within the first 24 hours after the legislation was approved by the lawmaker to streamline the process of applying for forgiveness. The legislation also contained conditions meant to encourage more bank loans by community banks, specifically for minority-owned businesses that had trouble getting loans in the past.
“The Small Business Administration met the requirement to issue the one-page form for the forgiveness of PPP loans by 24 days after 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 released new forms.”
First Draw PPP Loan forgiveness terms
Nursing Loan Forgiveness Maryland – For borrowers who are eligible, 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 employee compensation and the.
- The loan proceeds are spent on payroll expenses and other expenses that are eligible and
- A minimum of 60% of the funds go to the cost of payroll
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible customers are eligible for loan repayment when the loan is paid within an 8– to 24 week period.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the exact same way.
- The proceeds of the loan can be used to pay for payroll costs or other eligible expenses.
- At least 60% of the profits are spent on payroll costs
- How do I apply for loan forgiveness and when to apply
A borrower may apply for forgiveness only after the loan’s proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers may apply for forgiveness at any point up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 months after the last day of the period covered, then PPP loans are no longer deferred, and the borrower will be required to make payment to their PPP lender.