Citizens Bank Student Loan Forgiveness

Citizens Bank Student Loan Forgiveness

The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to meet the requirements of the latest stimulus legislation. 

The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified 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, especially for minority-owned companies that struggled to get loans last year.

Citizens Bank 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 24 hours from the date of the enactment of the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued new forms that were updated.”

Forgiveness terms for the initial draw of PPP loans

Citizens Bank Student Loan Forgiveness – For eligible borrowers First Draw PPP loans can be suitable to forgive loans. This happens when the loan is disbursed within an 8 to 24-week timeframe.

  • The same goes for the compensation and employees.
  • The proceeds from the loan may be used to pay for the cost of payroll as well as other eligible expenses.
  • A minimum of 60% of proceeds are used to pay for payroll expenses

Second Draw PPP Loan Forgiveness The terms

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

  • Employee and compensation levels are maintained in the same way as is required for the First Draw PPP loan
  • The loan proceeds could be used to pay for payroll costs or other eligible expenses.
  • Minimum 60% of proceeds go to the cost of payroll
  • How do I request loan forgiveness and when

A borrower can apply for forgiveness after all loan proceeds to which the borrower wants forgiveness have been utilized. Borrowers may apply for forgiveness at any time up to the date at which the loan matures. If they do not file for forgiveness within 10 months after the end of the time period that was covered, then PPP loan payments can no longer deferred, and borrowers will begin making payment to their PPP lender.

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