The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, along with newly revised and updated forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion in financing for small-scale businesses looking for forgiveness loans to help them to deal with the effects of economic collapse from the coronavirus outbreak. The law requires that the SBA provide simplified forms within the first 24 hours of the signing into law. This is to simplify the process of applying for forgiveness. It also included conditions that encourage community banks to lend more, especially to minority-owned businesses who had a difficult time getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and 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 in 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.”
First Draw PPP Conditions for loan forgiveness
Student Loan Forgiveness Arkansas – For eligible borrowers, First Draw PPP loans are eligible for loan forgiveness. This applies if the loan disbursement occurs within an 8– to 24 week period.
- The same goes for the employee compensation and the.
- The loan proceeds can be used to cover expenses for payroll or other expenses that are eligible.
- At least 60% of profits are used for the cost of payroll
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans made to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24 week covered period following the loan’s disbursement
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
- The loan funds are used on payroll costs and other expenses that are eligible and
- A minimum of 60% of proceeds are used to pay for payroll expenses
- What is the best time to apply for loan forgiveness
The borrower is eligible for forgiveness only after all loan proceeds to which the borrower has applied for forgiveness have been utilized. The borrower can apply for forgiveness at any point up to the loan’s maturity date. If they do not file for forgiveness within 10 years of the end of the time period that was covered the PPP loans are no longer deferred, and the borrower will be required to make payment to their PPP lender.
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