Voicemail About Student Loan Forgiveness

The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the current stimulus law. 

Congress approved the COVID-19 relief package in the month of March, which provided $284 billion of funding to small businesses that needed loans. This money was used to reduce the economic burden of the coronavirus outbreak. The law required that the SBA provide simplified forms within 24 hours of the legislation’s signing into law. This was done to simplify the process of applying for forgiveness. The legislation also contained conditions that encourage community banks to lend more specifically to minority-owned companies that had difficulty getting loans in the past.

Voicemail About 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 PPP form loan forgiveness within the first 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published more updated forms.”

First Draw PPP Loan forgiveness terms

Voicemail About Student Loan Forgiveness – For those who qualify, First Draw PPP loans can be qualified to be forgiven. This is if the loan disbursement occurs within an 8 to 24-week timeframe.

  • Pay and worker levels are kept at a constant level.
  • The proceeds of the loan can be used to pay payroll costs or other eligible expenses.
  • At least 60% of profits are used for the cost of payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during the 8to 24 week covered period 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 proceeds of the loan can be used to pay expenses for payroll or other eligible expenses.
  • Minimum 60% of profits go towards payroll costs
  • How and when to apply for loan forgiveness

The borrower is eligible for forgiveness once all loan proceeds to which the borrower wants forgiveness have been utilized. The borrower can request forgiveness anytime up to the maturity date of the loan. Borrowers who don’t request forgiveness within 10 month after the date they will be able to repay the loan are eligible to receive payment from their PPP lender.

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