The U.S. Small Business Administration has issued a one-page form that simplifies the application for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the latest stimulus law.
Congress approved the COVID-19 relief package in the month of March that offered $284 billion in funding to small businesses that needed loans. This money was used to mitigate the economic effects of the coronavirus outbreak. It included a requirement for the SBA to issue streamlined forms within 24 days of the bill being approved by the lawmaker to streamline the procedure of applying for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, particularly for minority-owned businesses who had trouble getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to issue 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. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released updated forms.”
First Draw PPP Loan forgiveness terms
Student Loan Debt Forgiveness Bill – For borrowers who are eligible First Draw PPP loans can be eligible for loan forgiveness. This is when the loan payment is made within an 8– to 24-week timeframe.
- The same goes for the employee compensation and the.
- The loan proceeds can be used to cover the cost of payroll as well as other eligible expenses.
- At least 60% of profits go towards expenses for payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans to eligible borrowers are eligible for loan forgiveness if the loan is paid within an 8to 24 week period.
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the exact same way.
- The loan funds could be used to pay for the cost of payroll as well as other eligible expenses.
- Minimum 60% of profits go towards the cost of payroll
- What is the best time to apply for loan forgiveness?
A borrower may apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers may apply for forgiveness at any point up to the date of maturity. Borrowers who don’t request forgiveness within 10 months of the end date of the loan will be able to receive payment from their PPP lender.