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. It also includes newly revised forms that comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month that offered $284 billion in funding to small businesses that needed loans. This money was used to mitigate the economic effects of the coronavirus pandemic. The law required that the SBA issue simplified forms within 24 hours after the bill’s passage into law. This was to facilitate the application for forgiveness. Additionally, it included conditions to encourage banks in the community 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 stated that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 days from the date of enactment under 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 that were updated.”
First Draw PPP Terms of loan forgiveness
Self Employed Ppp Loan Forgiveness – First Draw PPP loans made to eligible borrowers qualify for complete loan forgiveness if they do so during the 8- to 24-week period after loan disbursement:
- This is also true for pay and benefits for employees.
- The loan funds are used on payroll expenses as well as other expenses eligible for reimbursement; and
- At least 60% of funds go to payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans to qualified borrowers are eligible for loan repayment when the loan is paid within an 8– 24 week period.
- The levels of compensation and employee pay are maintained in the same way in accordance with the First Draw PPP loan
- The loan proceeds could be used to pay for payroll costs or other expenses that are eligible.
- At least 60% of profits are used to pay for payroll expenses
- How to apply for loan forgiveness , and when to apply
A borrower can apply for forgiveness once all loan proceeds to which the borrower wants forgiveness have been utilized. Borrowers can request forgiveness at any point up to the date of maturity. If borrowers do not apply for forgiveness within 10 months of the last day of the covered period and the loan is not renewed, PPP loan payments can not deferred any longer, and the borrower will be required to make monthly payments to their PPP lender.
Download Self Employed Ppp Loan Forgiveness
Gallery of Self Employed Ppp Loan Forgiveness
