The U.S. Small Business Administration has released a 1-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief package last month and included $284 billion of financing to small businesses in need of loans. This money was used to mitigate the economic effects of the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within 24 days of the bill being adopted to make the process of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, specifically for minority-owned companies that struggled to get loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within the first 24 hours 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 released the updated forms.”
First Draw PPP Terms of loan forgiveness
Your Student Loan Has Been Flagged For Forgiveness – For those who qualify, First Draw PPP loans can be qualified to be forgiven. This is if the loan disbursement occurs within an 8 to 24 week period.
- It’s the same for employee compensation and the.
- The loan funds are used on payroll and other expenses that are eligible and
- A minimum of 60% of profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans for eligible borrowers can be qualified for loan forgiveness when the loan is paid within an 8– to 24 week time frame.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exactly the same manner.
- The loan funds can be used to cover payroll costs or other eligible expenses.
- Minimum 60% of proceeds go to expenses for payroll
- How to request loan forgiveness and when
After all loan funds have been utilized, a borrower can apply for forgiveness. The borrower can apply for forgiveness at any time up to the loan’s maturity date. Borrowers who don’t request forgiveness within 10 month of the expiration date of the loan will be able to receive payment from their PPP lender.