The U.S. Small Business Administration has released a form of one page that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the most recent stimulus legislation.
The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help deal with the financial fallout of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within the first 24 hours of the legislation being adopted to make the procedure of applying for forgiveness, along with conditions that aim to increase the number of loans from community banks, specifically for minority-owned companies that were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 days of 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
Time Mark Solutions Student Loan Forgiveness – First Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness during the 8- to 24-week covered period following the loan’s disbursement
- The same goes for the employee compensation and the.
- The loan proceeds are spent on payroll and other eligible expenses; and
- A minimum of 60% of the proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans for eligible borrowers are eligible for loan forgiveness when the loan is repaid within an 8– 24-week period.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exactly the same manner.
- The loan proceeds are used on payroll and other expenses that are eligible and
- At least 60% of funds go to the cost of payroll
- When and how do I apply for loan forgiveness
Once all of the loan’s proceeds have been used The borrower may apply to be forgiven. The borrower can request forgiveness any time up until the date of maturity of the loan. If they do not file for forgiveness within 10 months of the last day of the covered period and the loan is not renewed, PPP loans are not deferred any longer, and borrowers must make monthly payments to their PPP lender.