The U.S. Small Business Administration has released a form of one page that makes it easier to apply for the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the most recent stimulus law.
The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiveness loans to help them deal with the financial fallout of the coronavirus epidemic. The legislation required that the SBA release simplified forms within the first 24 hours of the legislation’s signing into law. This was done to make it easier to apply for forgiveness. Additionally, it included conditions that encourage banks in the community to lend more specifically to minority-owned companies that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms.”
First Draw PPP Terms of loan forgiveness
Public Defender Loan Forgiveness – For borrowers who are eligible First Draw PPP loans are qualified for loan forgiveness. This is when the loan payment is made within an 8– to 24 week period.
- It’s the same for employee compensation and the.
- The loan proceeds are spent on payroll costs as well as other expenses eligible for reimbursement; and
- A minimum of 60% of the profits are spent on payroll costs
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to qualified borrowers are qualified for loan forgiveness when the loan is paid within an 8to 24 week period.
- Pay and worker levels are maintained in the same way as required for the First Draw PPP loan
- The loan funds can be used to pay for payroll costs or other expenses that are eligible.
- A minimum of 60% of the proceeds are spent on payroll costs
- How do I request loan forgiveness and the time to apply
When all of the loan proceeds have been used The borrower may apply to be forgiven. Borrowers can request forgiveness at any point up to the date of maturity. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan are able to receive the loan payment from their PPP lender.