The U.S. Small Business Administration has issued a one-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that comply with the most recent stimulus law.
The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them cope with the economic fallout of the coronavirus epidemic. The legislation required that the SBA issue simplified forms within the first 24 hours of the signing into law. This was done to facilitate the application for forgiveness. The legislation also contained conditions that would encourage community banks to lend more specifically to minority-owned companies that had difficulty getting loans last year.
“The Small Business Administration met the requirement of releasing the one-page form for loan forgiveness under the PPP by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued the updated forms.”
First Draw PPP Terms of loan forgiveness
T D Bank PPP Loan Forgiveness Application – First Draw PPP loans given to borrowers who are eligible can be granted complete loan forgiveness if they do so during the 8- to 24-week period after the loan’s disbursement
- It’s the same for employee compensation and the.
- The proceeds from the loan may be used to pay for payroll costs or other expenses that are eligible.
- At least 60% of the proceeds are used for the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans to eligible borrowers can be qualified for loan forgiveness when the loan is paid within an 8– to 24 week period.
- Pay and worker levels are kept in the same way as required for the First Draw PPP loan
- The loan proceeds are spent on payroll expenses as well as other eligible expenses and
- At least 60% of profits are used for the cost of payroll
- What is the best time to apply for loan forgiveness
When all of the loan funds have been utilized the borrower is eligible to be forgiven. Borrowers may apply for forgiveness at any time until the date at which the loan matures. If they do not file for forgiveness within 10 months after the date of expiration of the covered period, then PPP loan payments can no longer deferred and the borrower will be required to make payment to their PPP lender.