The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to conform to the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief plan last month, which provided $284 billion of funding to small businesses in need of loans. The funds were used to offset the economic impact of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 hours after the legislation was signed into law to simplify the procedure of applying for forgiveness. The legislation also contained conditions that aim to increase the number of bank loans by community banks, especially for minority-owned companies that had trouble getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for 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 published new forms.”
First Draw PPP Loan forgiveness terms
Where To Apply For Student Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans can be qualified to forgive loans. This applies if the loan disbursement occurs within an 8 to 24 week period.
- This is also true for employee compensation and the.
- The loan proceeds can be used to pay for expenses for payroll or other eligible expenses.
- At least 60% of proceeds go to the cost of payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans to qualified customers are qualified for loan forgiveness when the loan is repaid within an 8– to 24-week time frame.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exactly the same manner.
- The loan funds could be used to pay for the cost of payroll as well as other eligible expenses.
- A minimum of 60% of the profits go towards expenses for payroll
- How to request loan forgiveness and when to apply
When all of the loan proceeds have been used The borrower may apply to be forgiven. Borrowers may apply for forgiveness at any time up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the covered period, then PPP loan payments are no longer deferred and borrowers must make monthly payments to their PPP lender.