Application For Student Loan Forgiveness Due To Disability

Application For Student Loan Forgiveness Due To Disability

The U.S. Small Business Administration has issued a one-page form that simplifies the application for forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the most recent stimulus legislation. 

The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion of funds for small businesses that want forgivable loans to help them to deal with the effects of economic collapse from the coronavirus outbreak. The legislation required that the SBA provide simplified forms within the first 24 hours of the legislation’s signing into law. This is to make it easier to apply for forgiveness. It also included conditions to encourage banks in the community to lend more specifically to minority-owned companies who had a difficult time getting loans last year.

Application For Student Loan Forgiveness Due To Disability

“The Small Business Administration met the requirements to release the one page form for the forgiveness of PPP loans by 24 days after the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released the updated forms.”

First Draw PPP Loan forgiveness terms

Application For Student Loan Forgiveness Due To Disability – First Draw PPP loans given to eligible borrowers qualify for total loan forgiveness within the 8-to 24 week period that follows the loan’s disbursement

  • It’s the same for pay and benefits for employees.
  • The proceeds from the loan may be used to pay expenses for payroll or other expenses that are eligible.
  • At least 60% of the proceeds are spent on payroll costs

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans made to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24 week duration following loan disbursement:

  • The First Draw PPP loan requires that the employee and compensation levels be maintained in an exactly the same manner.
  • The loan proceeds are used on payroll expenses as well as other eligible expenses and
  • A minimum of 60% of the proceeds go to expenses for payroll
  • How to request loan forgiveness and the time to apply

A borrower can apply for forgiveness once all loan proceeds to which the borrower is requesting forgiveness have been used. Borrowers can request forgiveness at any time until the date at which the loan matures. Borrowers who don’t request forgiveness within 10 months after the date they will be able to repay the loan will be able to receive loan payments from their PPP lender.

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