Call From Student Loan Forgiveness

Call From Student Loan Forgiveness

The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to comply with the latest stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgiven loans to help deal with the financial fallout from the coronavirus outbreak. The package also mandated the SBA to issue streamlined forms within 24 hours of the bill being approved by the lawmaker to streamline the application process for forgiveness. The legislation also contained conditions meant to encourage more bank loans by community banks, particularly for minority-owned businesses who struggled to get loans last year.

Call From Student Loan Forgiveness

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

First Draw PPP Conditions for loan forgiveness

Call From Student Loan Forgiveness – First Draw PPP loans given to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so during the 8- to 24-week covered period following loan disbursement:

  • Pay and worker levels are kept at a constant level.
  • The loan funds are used on payroll expenses and other expenses that are eligible and
  • A minimum of 60% of proceeds are used for the cost of payroll

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans given to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24 week time period after the loan’s disbursement

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

A borrower can apply for forgiveness only after all loan proceeds for which the borrower wants forgiveness have been utilized. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 years of the last day of the covered period the PPP loans are no longer deferred, and borrowers must make loan payments to their PPP lender.

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