Phoenix Loan Forgiveness

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, along with newly updated and revised forms to conform to the requirements of the most recent stimulus legislation. 

Congress approved the COVID-19 relief plan last month and provided $284 billion of funding for small-scale businesses who needed loans. The money was intended to offset the economic impact of the coronavirus epidemic. The law requires that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This was to facilitate the application for forgiveness. Additionally, it included conditions that encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans last year.

Phoenix Loan Forgiveness

“The Small Business Administration met the requirement of releasing the single-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 who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued new forms that were updated.”

First Draw PPP Conditions for loan forgiveness

Phoenix Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans are suitable for loan forgiveness. This is when the loan payment is made within an 8 to 24-week timeframe.

  • The levels of compensation and employee pay are maintained
  • The proceeds from the loan may be used to pay payroll costs or other eligible expenses.
  • At least 60% of profits are used for the cost of payroll

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans for eligible borrowers are eligible for loan forgiveness when the loan is repaid within an 8to 24-week time frame.

  • The levels of compensation and employee pay are kept in the same way in accordance with the First Draw PPP loan
  • The loan proceeds are spent on payroll expenses and other expenses that are eligible and
  • At least 60% of proceeds go to expenses for payroll
  • How do I request loan forgiveness and when

When all of the loan proceeds have been used The borrower may apply to be forgiven. Borrowers can apply for forgiveness at any time prior to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the time period that was covered the PPP loan payments are not deferred any longer, and the borrower will be required to make loan payments to their PPP lender.

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