Law Student Loan Forgiveness Program

The U.S. Small Business Administration has released a form of one page that simplifies the application for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms to comply with the most recent stimulus law. 

The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgivable loans to help them deal with the financial fallout of the coronavirus epidemic. The legislation required that the SBA release simplified forms within 24 hours after the bill’s passage into law. This is to make it easier to apply for forgiveness. It also included conditions that encourage banks in the community to lend more particularly to minority-owned businesses that had difficulty getting loans last year.

Law Student Loan Forgiveness Program

“The Small Business Administration met the requirements to release the single-page form for loan forgiveness under the PPP within 24 days of the date of enactment 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 published more updated forms.”

First Draw PPP Conditions for loan forgiveness

Law Student Loan Forgiveness Program – First Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if within the 8 to 24-week covered period following the disbursement of loan:

  • The levels of compensation and employee pay are kept at a constant level.
  • The loan funds are used on payroll costs and other expenses that are eligible and
  • A minimum of 60% of the funds go to payroll costs

Second Draw PPP Loan Forgiveness The terms

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

  • The First Draw PPP loan requires that the compensation and employee levels are maintained in the exactly the same manner.
  • The loan funds are used on payroll costs and other expenses that are eligible and
  • At least 60% of proceeds are used to pay for payroll expenses
  • When and how do I apply for loan forgiveness?

A borrower can apply for forgiveness only after all loan proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers may apply for forgiveness at any time up to the date at which the loan matures. 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 no longer deferred, and borrowers will begin making loan payments to their PPP lender.

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