The U.S. Small Business Administration has issued a one-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the current stimulus law.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. The legislation required that the SBA issue simplified forms within the first 24 hours after the bill’s passage into law. This was done to make it easier to apply for forgiveness. Additionally, it included conditions that would encourage community banks to make more loans, especially to minority-owned businesses who had a difficult time getting loans last year.
“The Small Business Administration met the requirements to release the single-page form for the forgiveness of PPP loans within 24 hours of the date of the 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 issued new forms.”
First Draw PPP Loan forgiveness terms
Ppe Loan Forgiveness – First Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness within the 8-to 24-week covered period following the loan’s disbursement
- The levels of compensation and employee pay are kept at a constant level.
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- At least 60% of funds go to expenses for payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans to qualified borrowers can be eligible for loan forgiveness if the loan is paid within an 8– 24-week time frame.
- Employee and compensation levels are kept in the same way as is required for the First Draw PPP loan
- The loan funds can be used to pay expenses for payroll or other eligible expenses.
- A minimum of 60% of the proceeds go to payroll costs
- How to apply for loan forgiveness and when
The borrower is eligible for forgiveness only after all loan proceeds to which the borrower has applied for forgiveness have been utilized. Borrowers may apply for forgiveness at any time until the date of maturity. If they do not file for forgiveness within 10 months of the end of the period covered the PPP loans are no longer deferred and the borrower will be required to make payment to their PPP lender.
Download Ppe Loan Forgiveness
Gallery of Ppe Loan Forgiveness
