The U.S. Small Business Administration has released a form of one page that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the latest stimulus law.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion in financing for small-scale businesses looking for forgivable loans to help them deal with the financial fallout of the coronavirus epidemic. It included a requirement for the SBA to issue simplified forms within 24 days of the bill being adopted to make the process of applying for forgiveness. The legislation also contained conditions that aim to increase the number of loans from community banks, specifically for minority-owned businesses that were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within the first 24 hours from the date of enactment under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued the updated forms.”
Terms for forgiveness for the initial draw of PPP loans
Us Bank Ppp Loan Forgiveness – For those who qualify First Draw PPP loans can be suitable for loan forgiveness. This is if the loan disbursement occurs within an 8 to 24-week timeframe.
- This is also true for employee compensation and the.
- The loan proceeds can be used to cover expenses for payroll or other expenses that are eligible.
- At least 60% of proceeds go to the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24-week time period after the loan’s disbursement
- Employee and compensation levels are maintained in the same way as required for the First Draw PPP loan
- The proceeds of the loan could be used to pay payroll costs or other eligible expenses.
- A minimum of 60% of profits are spent on payroll costs
- How do I apply for loan forgiveness , and when to apply
A borrower can apply for forgiveness only after all loan proceeds to which the borrower is requesting forgiveness have been used. Borrowers may apply for forgiveness at any time up to the date of maturity. Borrowers who do not request forgiveness within 10 months of the end date of the loan will be able to receive loan payments from their PPP lender.