The U.S. Small Business Administration has issued a one-page form that simplifies the application for 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 relief package that Congress adopted last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. The law required that the SBA provide simplified forms within 24 hours of the signing into law. This is to make it easier to apply for forgiveness. Additionally, it included conditions that would encourage banks in the community to lend more, especially to minority-owned businesses that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within the first 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published the updated forms.”
First Draw PPP Conditions for loan forgiveness
University Of Phoenix Loan Forgiveness Lawsuit – For those who qualify, First Draw PPP loans can be eligible to be forgiven. This is when the loan is disbursed within an 8 to 24-week timeframe.
- It’s the same for compensation and employees.
- The loan proceeds are spent on payroll expenses and other eligible expenses; and
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to eligible customers are qualified for loan forgiveness when the loan is paid within an 8– to 24 week time frame.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exactly the same manner.
- The loan funds are used on payroll expenses as well as other eligible expenses and
- A minimum of 60% of the proceeds go to expenses for payroll
- How and when to apply for loan forgiveness?
Once all of the loan funds have been utilized The borrower may apply to be forgiven. Borrowers can request forgiveness at any time until the date of maturity. If borrowers do not apply for forgiveness within 10 month of the end date of the loan are eligible to receive payment from their PPP lender.