Sole Proprietor Ppp Loan Forgiveness Rules

The U.S. Small Business Administration has issued a one-page form 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 latest stimulus law. 

The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion of funding for small businesses seeking forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. The law required that the SBA provide simplified forms within 24 hours of the legislation’s signing into law. This is to simplify the process of applying for forgiveness. Additionally, it included conditions to encourage banks in the community to lend more particularly to minority-owned businesses who were unable to obtain loans in the past.

Sole Proprietor Ppp Loan Forgiveness Rules

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the obligation 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. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued new forms that were updated.”

First Draw PPP Terms of loan forgiveness

Sole Proprietor Ppp Loan Forgiveness Rules – First Draw PPP loans made to borrowers who are eligible can be granted complete loan forgiveness if they do so during the 8- to 24-week period after the loan’s disbursement

  • The same goes for the employee compensation and the.
  • The loan proceeds are used on payroll and other expenses that are eligible and
  • A minimum of 60% of the funds go to expenses for payroll

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans to eligible customers are eligible for loan repayment when the loan is paid within an 8– to 24 week period.

  • The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exactly the same manner.
  • The loan proceeds are used on payroll and other expenses that are eligible and
  • Minimum 60% of profits go towards payroll costs
  • What is the best time to apply for loan forgiveness

Once all of the loan’s proceeds have been used the borrower is eligible for forgiveness. The borrower can request forgiveness any time up to the maturity date of the loan. Borrowers who do not request forgiveness within 10 month after the date they will be able to repay the loan will be able to receive loan payments from their PPP lender.

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