The U.S. Small Business Administration has released a form of one page that makes it easier to apply for forgiveness 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 aid package Congress passed last month revived the PPP with $284 billion of funding for small businesses seeking forgivable loans to help them to deal with the effects of economic collapse of the coronavirus epidemic. It included a requirement for the SBA to issue simplified forms within 24 days of the legislation being adopted to make the application process for forgiveness, along with conditions meant to encourage more bank loans by community banks, particularly for minority-owned companies that struggled to get loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within 24 hours from 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 additional updated forms.”
Terms for forgiveness for the first draw of PPP loans
Pa Loan Forgiveness For Nurses – For eligible borrowers, First Draw PPP loans can be qualified for loan forgiveness. This happens when the loan is disbursed within an 8 to 24-week period.
- This is also true for compensation and employees.
- The proceeds of the loan can be used to pay for payroll costs or other expenses that are eligible.
- At least 60% of the profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to qualified customers are eligible for loan forgiveness when the loan is paid within an 8– 24 week time frame.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an identical manner.
- The proceeds of the loan could be used to pay for expenses for payroll or other eligible expenses.
- Minimum 60% of funds go to the cost of payroll
- How to request loan forgiveness and when
After all loan proceeds have been used, a borrower can apply to be granted forgiveness. The borrower can apply for forgiveness at any time up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 month of the expiration date of the loan are able to receive the loan payment from their PPP lender.