The U.S. Small Business Administration has released a form of one page that simplifies the application for forgiveness of Paycheck Protection Program loans. It also includes newly revised forms to comply with the current stimulus law.
The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. The law required that the SBA release simplified forms within the first 24 hours of the legislation’s signing into law. This is to facilitate the application for forgiveness. Additionally, it included conditions that encourage banks in the community to lend more, especially to minority-owned businesses that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 hours 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 released updated forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness For Nurses – For borrowers who are eligible, First Draw PPP loans are qualified to be forgiven. This is when the loan payment is made within an 8 to 24-week period.
- Pay and worker levels are maintained
- The proceeds of the loan can be used to pay for expenses for payroll or other expenses that are eligible.
- At least 60% of profits go towards payroll costs
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to eligible borrowers can be qualified for loan forgiveness when the loan is repaid within an 8– 24 week period.
- The levels of compensation and employee pay are kept in the same way as required for the First Draw PPP loan
- The loan funds can be used to cover the cost of payroll as well as other eligible expenses.
- A minimum of 60% of the profits go towards expenses for payroll
- How and when to apply for loan forgiveness?
After all loan’s proceeds have been used The borrower may apply to be granted forgiveness. Borrowers can request forgiveness at any time until the loan’s maturity date. If borrowers do not apply for forgiveness within 10 month of the end date of the loan will be able to receive payment from their PPP lender.