501c3 Student Loan Forgiveness

501c3 Student Loan Forgiveness

The U.S. Small Business Administration released a one-page form that aims to simplify the application process to forgive Paycheck Protection Program loans, as well as newly updated and revised forms that meet the requirements of the most recent stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March and offered $284 billion in funding to small businesses in need of loans. The money was intended to reduce the economic burden of the coronavirus outbreak. The legislation required that the SBA release simplified forms within 24 hours of the signing into law. This was done to simplify the process of applying for forgiveness. The legislation also contained conditions that would encourage community banks to make more loans particularly to minority-owned businesses that had difficulty getting loans last year.

501c3 Student Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP 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 new forms.”

First Draw PPP Loan forgiveness terms

501c3 Student Loan Forgiveness – For those who qualify First Draw PPP loans are suitable to be forgiven. This happens when the loan is disbursed within an 8 to 24-week timeframe.

  • It’s the same for pay and benefits for employees.
  • The loan proceeds are used on payroll costs as well as other expenses eligible for reimbursement; and
  • A minimum of 60% of the profits are spent on payroll costs

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24-week covered period following loan payment:

  • The First Draw PPP loan requires that the employee and compensation levels are maintained in the exactly the same manner.
  • The loan proceeds can be used to pay for payroll costs or other expenses that are eligible.
  • A minimum of 60% of the profits are spent on payroll costs
  • When and how do I apply for loan forgiveness

A borrower can apply for forgiveness once all loan proceeds for which the borrower wants forgiveness have been used. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 years of the end of the time period that was covered and the loan is not renewed, PPP loan payments can no longer deferred, and borrowers must make loan payments to their PPP lender.

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