The U.S. Small Business Administration has released a 1-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the current stimulus law.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them to deal with the effects of economic collapse of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 days of the bill being approved by the lawmaker to streamline the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, especially for minority-owned companies that struggled to get loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 days from 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 the updated forms.”
First Draw PPP Terms of loan forgiveness
Why Public Service Loan Forgiveness Is So Unforgiving – For those who qualify First Draw PPP loans can be qualified for loan forgiveness. This happens when the loan is disbursed within an 8– to 24-week timeframe.
- This is also true for employee compensation and the.
- The proceeds from the loan may be used to pay expenses for payroll or other expenses that are eligible.
- A minimum of 60% of profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to eligible borrowers qualify for full loan forgiveness if during the 8to 24-week covered period following loan disbursement:
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
- The loan proceeds are used on payroll as well as other eligible expenses and
- Minimum 60% of proceeds go to expenses for payroll
- How to request loan forgiveness and when
A borrower can apply for forgiveness after all loan proceeds to which the borrower wants forgiveness have been utilized. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 months of the last day of the time period that was covered the PPP loans are no longer deferred and the borrower will be required to make monthly payments to their PPP lender.