The U.S. Small Business Administration has released a 1-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month and provided $284 billion of funding to small businesses in need of loans. This money was used to mitigate the economic effects of the coronavirus epidemic. The law required that the SBA issue simplified forms within 24 hours of the signing into law. This is to make it easier to apply for forgiveness. The legislation also contained conditions that would encourage community banks to lend more particularly to minority-owned businesses who had a difficult time 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 PPP form loan forgiveness within 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms.”
First Draw PPP Terms of loan forgiveness
Student Loan Forgiveness Trump – For borrowers who are eligible First Draw PPP loans can be suitable to be forgiven. This applies when the loan is disbursed within an 8 to 24 week period.
- This is also true for employee compensation and the.
- The proceeds of the loan can be used to pay for expenses for payroll or other eligible expenses.
- At least 60% of the proceeds are spent on payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to eligible borrowers are eligible for loan forgiveness when the loan is paid within an 8to 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 proceeds of the loan could be used to pay for payroll costs or other eligible expenses.
- A minimum of 60% of profits are spent on payroll costs
- How to apply for loan forgiveness , and when
Once all of the loan’s proceeds have been used The borrower may apply for forgiveness. Borrowers may apply for forgiveness at any time until the loan’s maturity date. If the borrower does not apply for forgiveness within 10 months of the last day of the covered period and the loan is not renewed, PPP loan payments are no longer deferred and borrowers will begin making monthly payments to their PPP lender.