How To Qualify For Student Loan Forgiveness

How To Qualify For 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 application process for forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to conform to the requirements of the latest stimulus legislation. 

Congress approved the COVID-19 relief plan last month that offered $284 billion in funding to small businesses in need of loans. The funds were used to reduce the economic burden of the coronavirus epidemic. The law required that the SBA release simplified forms within 24 hours of the signing into law. This was to make it easier to apply for forgiveness. Additionally, it included conditions that encourage banks in the community to lend more particularly to minority-owned businesses who had a difficult time getting loans last year.

How To Qualify For Student Loan Forgiveness

“The Small Business Administration met the requirement to issue the one page form for PPP loan forgiveness within 24 days of 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 published more updated forms.”

First Draw PPP Loan forgiveness terms

How To Qualify For Student Loan Forgiveness – For eligible borrowers, First Draw PPP loans are qualified to forgive loans. This applies if the loan disbursement occurs within an 8 to 24 week period.

  • It’s the same for employee compensation and the.
  • The proceeds from the loan may be used to pay for payroll costs or other expenses that are eligible.
  • A minimum of 60% of the profits go towards payroll costs

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans given to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24 week covered period following loan disbursement:

  • The levels of compensation and employee pay are maintained in the same way in accordance with the First Draw PPP loan
  • The loan proceeds are spent on payroll costs as well as other eligible expenses and
  • A minimum of 60% of the profits go towards payroll costs
  • What is the best time to apply for loan forgiveness?

After all loan’s proceeds have been used the borrower is eligible to be granted forgiveness. Borrowers may apply for forgiveness at any time until the loan’s maturity date. If the borrower does not apply for forgiveness within 10 months after the end of the time period that was covered and the loan is not renewed, PPP loan payments can not deferred any longer, and the borrower will be required to make payment to their PPP lender.

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