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, as well as newly updated and revised forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them cope with the economic fallout from the coronavirus outbreak. It also included a requirement that the SBA to issue simplified forms within the first 24 hours of the bill being signed into law to simplify the procedure of applying for forgiveness. The legislation also contained conditions that aim to increase the number of bank loans by community banks, specifically for minority-owned businesses who had trouble getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the obligation to issue the one-page PPP form 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 published additional updated forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness Calculator – For those who qualify First Draw PPP loans are qualified to be forgiven. This applies when the loan is disbursed within an 8– to 24-week timeframe.
- It’s the same for compensation and employees.
- The proceeds from the loan may be used to pay for the cost of payroll as well as other eligible expenses.
- At least 60% of proceeds go to payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible borrowers are qualified for loan forgiveness when the loan is paid within an 8– to 24 week period.
- The levels of compensation and employee pay are maintained in the same manner in accordance with the First Draw PPP loan
- The loan funds are used on payroll as well as other eligible expenses and
- A minimum of 60% of the profits are used for the cost of payroll
- How to request loan forgiveness and when to apply
A borrower may apply for forgiveness once the loan’s proceeds for which the borrower is requesting forgiveness have been used. Borrowers may apply for forgiveness at any point up to the date at which the loan matures. If they do not file for forgiveness within 10 months after the end of the covered period, then PPP loan payments can not deferred any longer, and borrowers will begin making loan payments to their PPP lender.