Trump Public Service Loan Forgiveness

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 to comply with the current stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March, which included $284 billion of financing to small businesses that needed loans. The funds were used to mitigate the economic effects of the coronavirus pandemic. The law required that the SBA release simplified forms within 24 hours of the signing into law. This was to simplify the process of applying for forgiveness. The legislation also contained conditions to encourage banks in the community to lend more, especially to minority-owned businesses that had difficulty getting loans last year.

Trump Public Service Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within 24 hours of the date of enactment under the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued updated forms.”

Forgiveness terms for the initial draw of PPP loans

Trump Public Service Loan Forgiveness – For eligible borrowers, First Draw PPP loans can be eligible to be forgiven. This is when the loan is disbursed within an 8 to 24 week period.

  • It’s the same for employee compensation and the.
  • The loan proceeds are used on payroll costs and other expenses that are eligible and
  • A minimum of 60% of the proceeds go to the cost of payroll

Second Draw PPP Loan Forgiveness Conditions

Second Draw PPP loans made to borrowers who are eligible can be granted total loan forgiveness if they do so during the 8to 24 week covered period following loan payment:

  • The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exact same way.
  • The loan proceeds are used on payroll expenses as well as other eligible expenses and
  • Minimum 60% of profits go towards the cost of payroll
  • When and how do I apply for loan forgiveness?

A borrower may apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been utilized. 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 years of the date of expiration of the covered period and the loan is not renewed, PPP loans are not deferred any longer, and borrowers will begin making loan payments to their PPP lender.

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