The U.S. Small Business Administration has released a 1-page form 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 legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgivable loans to help them deal with the financial fallout of the coronavirus epidemic. The legislation required that the SBA provide simplified forms within the first 24 hours of the legislation’s signing into law. This was done to simplify the process of applying for forgiveness. It also included conditions that would encourage banks in the community to lend more specifically to minority-owned companies who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP 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 released the updated forms.”
First Draw PPP Loan forgiveness terms
When Will Biden Forgive Student Loans – For eligible borrowers, First Draw PPP loans are eligible for loan forgiveness. This applies when the loan payment is made within an 8– to 24 week period.
- It’s the same for employee compensation and the.
- The proceeds from the loan may be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of profits are used to pay for payroll expenses
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible borrowers are eligible for loan forgiveness when the loan is paid within an 8to 24-week period.
- The levels of compensation and employee pay are kept in the same way in accordance with the First Draw PPP loan
- The proceeds of the loan can be used to pay payroll costs or other eligible expenses.
- A minimum of 60% of the proceeds are used for the cost of payroll
- How do I apply for loan forgiveness and when
When all of the loan funds have been utilized The borrower may apply to be forgiven. Borrowers may apply for forgiveness at any time up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 months after the date of expiration of the time period that was covered and the loan is not renewed, PPP loans are no longer deferred, and borrowers must make loan payments to their PPP lender.