The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms to comply with the latest stimulus law.
The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of financing for small-scale businesses looking for forgiveness loans to help them to deal with the effects of economic collapse of the coronavirus epidemic. It included a requirement for the SBA to issue streamlined forms within the first 24 hours of the legislation being signed into law to simplify the process of applying for forgiveness. It also included conditions that aim to increase the number of bank loans by community banks, especially for minority-owned businesses who had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs wrote that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 days from the date of enactment in 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.”
Terms for forgiveness for the initial draw of PPP loans
Student Loan Forgiveness Ny – For borrowers who are eligible, First Draw PPP loans can be qualified to forgive loans. This is when the loan is disbursed within an 8– to 24-week timeframe.
- This is also true for pay and benefits for employees.
- The loan proceeds are used on payroll and other eligible expenses; and
- A minimum of 60% of profits are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans for eligible borrowers can be eligible for loan repayment if the loan is paid within an 8– 24-week time frame.
- Pay and worker levels are maintained in the same way as required for the First Draw PPP loan
- The loan funds are used on payroll and other expenses that are eligible and
- At least 60% of proceeds are used for the cost of payroll
- How and when to apply for loan forgiveness?
When all of the loan funds have been utilized the borrower is eligible to be forgiven. The borrower can request forgiveness any time up to the maturity date of the loan. Borrowers who do not request forgiveness within 10 months of the end date of the loan are able to receive the loan payment from their PPP lender.