The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the application process for forgiveness of Paycheck Protection Program loans, together with updated and revised forms to conform to the requirements of the latest stimulus legislation.
The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. The law requires that the SBA issue simplified forms within the first 24 hours after the bill’s passage into law. This is to facilitate the application for forgiveness. Additionally, it included conditions that would encourage community banks to make more loans, especially to minority-owned businesses that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within the first 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 issued more updated forms.”
First Draw PPP Terms of loan forgiveness
PPP Loan Forgiveness Application And Instructions Released By Sba – For those who qualify First Draw PPP loans are qualified to forgive loans. This applies when the loan payment is made within an 8– to 24-week period.
- This is also true for employee compensation and the.
- The proceeds from the loan may be used to cover payroll costs or other expenses that are eligible.
- A minimum of 60% of profits are used to pay for payroll expenses
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to eligible borrowers can be qualified for loan forgiveness when the loan is repaid within an 8– to 24-week period.
- The First Draw PPP loan requires that the compensation and employee levels be maintained in the identical manner.
- The loan proceeds could be used to pay for payroll costs or other eligible expenses.
- A minimum of 60% of the proceeds go to expenses for payroll
- When and how do I apply for loan forgiveness
The borrower is eligible for forgiveness after the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. The borrower can apply for forgiveness at any point up to the date of maturity. If the borrower does not apply for forgiveness within 10 years of the end of the covered period the PPP loan payments are not deferred any longer, and borrowers will begin making monthly payments to their PPP lender.