Public Service Loan Forgiveness Calculator

The U.S. Small Business Administration has released a form of one page which makes it simpler to request the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that comply with the most recent stimulus law. 

The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. The package also mandated the SBA to issue simplified forms within 24 hours of the legislation being adopted to make the application process for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, especially for minority-owned businesses who struggled to get loans in the past.

Public Service Loan Forgiveness Calculator

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within the first 24 hours from the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued the updated forms.”

First Draw PPP Conditions for loan forgiveness

Public Service Loan Forgiveness Calculator – For those who qualify First Draw PPP loans can be qualified for loan forgiveness. This is when the loan payment is made within an 8 to 24-week period.

  • Pay and worker levels are ensured
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60% of proceeds go to the cost of payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness if they do so during the 8– to 24-week covered period following loan disbursement:

  • Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
  • The loan proceeds could be used to cover expenses for payroll or other eligible expenses.
  • A minimum of 60% of the profits are used for the cost of payroll
  • How do I apply for loan forgiveness and the time to apply

After all loan funds have been utilized the borrower is eligible to be forgiven. The borrower can apply for forgiveness at any time until the loan’s maturity date. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan are eligible to receive the loan payment from their PPP lender.

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