The U.S. Small Business Administration has released a single-page form aimed at simplifying the application process for the forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms to conform to the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March, which included $284 billion of financing for small-scale businesses who needed loans. This money was used to offset the economic impact of the coronavirus outbreak. The legislation required that the SBA provide simplified forms within the first 24 hours after the bill’s passage into law. This was to simplify the process of applying for forgiveness. The legislation also contained conditions that would encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within the first 24 hours from the date of enactment under 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 Loan forgiveness terms
Sc Pace Loan Forgiveness Form – First Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if within the 8-to 24-week covered period following the disbursement of loan:
- This is also true for employee compensation and the.
- The loan funds are used on payroll expenses and other eligible expenses; and
- A minimum of 60% of the profits go towards payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans to qualified borrowers can be eligible for loan repayment if the loan is paid within an 8– to 24-week time frame.
- The First Draw PPP loan requires that the compensation and employee levels be maintained in an exact same way.
- The loan proceeds can be used to cover expenses for payroll or other eligible expenses.
- At least 60% of the profits are spent on payroll costs
- What is the best time to apply for loan forgiveness?
After all loan proceeds have been used The borrower may apply for forgiveness. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 month of the expiration date of the loan will be able to receive the loan payment from their PPP lender.