Can Navient Loans Be Forgiven

Can Navient Loans Be Forgiven

The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process for the forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to comply with the most recent stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March that included $284 billion of financing to small businesses in need of loans. This money was used to mitigate the economic effects of the coronavirus epidemic. It included a requirement for the SBA to issue simplified forms within the first 24 hours of the legislation being adopted to make the application process for forgiveness. It also included conditions meant to encourage more bank loans by community banks, especially for minority-owned companies that had trouble getting loans in the past.

Can Navient Loans Be Forgiven

“The Small Business Administration met the requirement of releasing the single-page form for loan forgiveness under the PPP by 24 days after the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released new forms.”

First Draw PPP Conditions for loan forgiveness

Can Navient Loans Be Forgiven – For those who qualify, First Draw PPP loans can be eligible to be forgiven. This is if the loan disbursement occurs within an 8 to 24 week period.

  • Pay and worker levels are kept at a constant level.
  • The loan proceeds are spent on payroll expenses and other expenses that are eligible and
  • A minimum of 60% of the profits are spent on payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans for eligible borrowers are eligible for loan forgiveness if the loan is paid within an 8to 24-week time frame.

  • Pay and worker levels are kept in the same way as required for the First Draw PPP loan
  • The loan proceeds could be used to pay expenses for payroll or other eligible expenses.
  • At least 60% of profits are used for the cost of payroll
  • What is the best time to apply for loan forgiveness?

A borrower can apply for forgiveness only after the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers are able to apply for forgiveness any time up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 months of the expiration date of the loan are eligible to receive the loan payment from their PPP lender.

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