Td Ppp Loan Forgiveness

Td Ppp Loan Forgiveness

The U.S. Small Business Administration has issued a one-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the current stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of funding for small businesses seeking forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 days of the legislation 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, especially for minority-owned companies that struggled to get loans in the past.

Td Ppp Loan Forgiveness

“The Small Business Administration met the requirement to issue the single-page form for the forgiveness of PPP loans by 24 days after the date of enactment 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 published more updated forms.”

Forgiveness terms in the first draw of PPP loans

Td Ppp Loan Forgiveness – First Draw PPP loans made to borrowers who meet the criteria are eligible for total loan forgiveness within the 8-to 24-week period after the loan’s disbursement

  • The levels of compensation and employee pay are kept at a constant level.
  • The proceeds of the loan can be used to pay for payroll costs or other expenses that are eligible.
  • At least 60% of proceeds are used for the cost of payroll

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24 week duration following the loan’s disbursement

  • Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
  • The proceeds of the loan can be used to pay expenses for payroll or other eligible expenses.
  • A minimum of 60% of profits are spent on payroll costs
  • What is the best time to apply for loan forgiveness?

A borrower can apply for forgiveness only after all loan proceeds to which the borrower wants forgiveness have been used. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 months of the expiration date of the loan are eligible to receive the loan payment from their PPP lender.

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