The U.S. Small Business Administration has issued a one-page form that simplifies the application for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the latest stimulus legislation.
The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgivable loans to help them cope with the economic fallout of the coronavirus epidemic. It included a requirement for the SBA to issue simplified forms within 24 hours of the bill being signed into law to simplify the application process for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, specifically for minority-owned businesses that had trouble getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to issue the PPP form, which is one page long, for loan forgiveness within the first 24 hours of the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released updated forms.”
First Draw PPP Terms of loan forgiveness
Prequalified For Student Loan Forgiveness – For eligible borrowers, First Draw PPP loans are eligible to forgive loans. This happens if the loan disbursement occurs within an 8 to 24-week timeframe.
- This is also true for employee compensation and the.
- The proceeds of the loan can be used to cover payroll costs or other eligible expenses.
- At least 60% of profits go towards expenses for payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24-week duration following loan payment:
- Pay and worker levels are maintained in the same way as required for the First Draw PPP loan
- The loan proceeds can be used to pay for expenses for payroll or other eligible expenses.
- A minimum of 60% of the funds go to payroll costs
- How and when to apply for loan forgiveness?
When all of the loan funds have been utilized The borrower may apply to be granted forgiveness. Borrowers can request forgiveness at any time until the date at which the loan matures. If they do not file for forgiveness within 10 months after the end of the covered period, then PPP loans are no longer deferred and borrowers must make loan payments to their PPP lender.
Download Prequalified For Student Loan Forgiveness
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