The U.S. Small Business Administration has released a form of one page that makes it easier to apply for forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that comply with the most recent stimulus law.
Congress approved the COVID-19 relief package in the month of March and included $284 billion of financing to small businesses that needed loans. The funds were used to offset the economic impact of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 hours of the bill being approved by the lawmaker to streamline the procedure of applying for forgiveness. It also included conditions designed to facilitate more bank loans by community banks, specifically for minority-owned companies 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 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 issued updated forms.”
Terms for forgiveness for the first draw of PPP loans
Second Ppp Loan Forgiveness – First Draw PPP loans given to eligible borrowers qualify for total loan forgiveness within the 8-to 24-week covered period following loan disbursement:
- This is also true for employee compensation and the.
- The proceeds of the loan can be used to pay for payroll costs or other eligible expenses.
- A minimum of 60% of the proceeds go to expenses for payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans to eligible borrowers are qualified for loan forgiveness when the loan is repaid within an 8– to 24 week time frame.
- The First Draw PPP loan requires that the employee and the compensation levels are maintained in the exact same way.
- The loan proceeds are used on payroll expenses as well as other eligible expenses and
- At least 60% of profits are used for the cost of payroll
- How do I apply for loan forgiveness , and the time to apply
Once all of the loan’s proceeds have been used, a borrower can apply to be forgiven. Borrowers can request forgiveness at any time up to the date of maturity. Borrowers who don’t request forgiveness within 10 month of the expiration date of the loan are eligible to receive payment from their PPP lender.