Msw Student Loan Forgiveness

The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, together with updated and revised forms that comply with the most recent stimulus legislation. 

Congress approved the COVID-19 relief plan last month that offered $284 billion in funding to small businesses that needed loans. The money was intended to offset the economic impact of the coronavirus outbreak. It also included a requirement that the SBA to issue simplified forms within the first 24 hours of the bill being adopted to make the procedure of applying for forgiveness. The legislation also contained conditions that aim to increase the number of loans from community banks, specifically for minority-owned companies that were unable to obtain loans in the past.

Msw Student Loan Forgiveness

“The Small Business Administration met the requirements to release the one page form for the forgiveness of PPP loans within 24 hours of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published new forms.”

Forgiveness terms in the first draw of PPP loans

Msw Student Loan Forgiveness – First Draw PPP loans given to eligible borrowers qualify for total loan forgiveness within the 8 to 24 week period that follows loan disbursement:

  • Employee and compensation levels are ensured
  • The proceeds of the loan can be used to cover the cost of payroll as well as other expenses that are eligible.
  • At least 60% of profits go towards expenses for payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24-week duration following loan payment:

  • The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exactly the same manner.
  • The loan proceeds could be used to pay for payroll costs or other expenses that are eligible.
  • A minimum of 60% of profits are used for the cost of payroll
  • What is the best time to apply for loan forgiveness

Once all of the loan funds have been utilized, a borrower can apply for 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 of the date of expiration of the time period that was covered the PPP loans are no longer deferred, and borrowers must make loan payments to their PPP lender.

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