The U.S. Small Business Administration has released a form of one page that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the latest stimulus law.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. The package also mandated the SBA to issue streamlined forms within 24 hours of the bill being signed into law to simplify the process of applying for forgiveness. It also included conditions designed to facilitate more bank loans by community banks, particularly for minority-owned businesses that had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published updated forms.”
First Draw PPP Conditions for loan forgiveness
Student Loan Forgiveness For Educators – For eligible borrowers First Draw PPP loans can be qualified to forgive loans. This happens when the loan is disbursed within an 8– to 24-week timeframe.
- This is also true for employee compensation and the.
- The loan funds are used on payroll expenses and other expenses that are eligible and
- Minimum 60% of proceeds go to expenses for payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans to qualified borrowers are qualified for loan forgiveness when the loan is repaid within an 8to 24-week period.
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
- The loan funds can be used to cover the cost of payroll as well as other eligible expenses.
- Minimum 60% of proceeds go to the cost of payroll
- How do I apply for loan forgiveness , and when to apply
When all of the loan’s proceeds have been used The borrower may apply for forgiveness. Borrowers can request forgiveness at any point up to the date at which the loan matures. If they do not file for forgiveness within 10 years of the end of the period covered and the loan is not renewed, PPP loan payments can no longer deferred, and the borrower will be required to make monthly payments to their PPP lender.