Will Parent Plus Loans Be Forgiven

Will Parent Plus Loans Be Forgiven

The U.S. Small Business Administration has issued a one-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 comply with the most recent stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of funding for small businesses seeking forgivable loans to help them deal with the financial fallout of the coronavirus epidemic. The package also mandated the SBA to issue simplified forms within 24 days of the bill being approved by the lawmaker to streamline the process of applying for forgiveness. It also included conditions that aim to increase the number of loans from community banks, specifically for minority-owned businesses that had trouble getting loans last year.

Will Parent Plus Loans Be Forgiven

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within 24 days from the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published updated forms.”

First Draw PPP Conditions for loan forgiveness

Will Parent Plus Loans Be Forgiven – For those who qualify, First Draw PPP loans are eligible to be forgiven. This happens when the loan is disbursed within an 8 to 24-week timeframe.

  • It’s the same for employee compensation and the.
  • The proceeds from the loan may be used to pay the cost of payroll as well as other eligible expenses.
  • At least 60% of proceeds are used to pay for payroll expenses

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to qualified borrowers can be eligible for loan repayment when the loan is paid within an 8to 24 week period.

  • Employee and compensation levels 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 expenses that are eligible.
  • At least 60% of funds go to the cost of payroll
  • When and how do I apply for loan forgiveness

A borrower may apply for forgiveness after the loan’s proceeds for which the borrower wants forgiveness have been used. The borrower can apply for forgiveness at any point up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 months after the end of the period covered, then PPP loans are no longer deferred and borrowers must make loan payments to their PPP lender.

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