The Biden administration has forgiven another $1.2 billion in student loan debt for about 153,000 borrowers enrolled in the Saving on a Valuable Education (SAVE) repayment plan.

To be eligible for this debt relief, SAVE enrollees must have been making at least 10 years of payments on a federal student loan of $12,000 or less, the Department of Education (DOE) said. 

Eligible borrowers should have begun to receive emails this week from President Joe Biden letting them know that their loans are forgiven and that they will not need to take any further action to receive relief. Next week, the DOE plans to begin to email borrowers who can become eligible for loan cancellation if they switch to the SAVE plan.

This part of the plan was originally set for implementation in July but the administration announced last month that it would accelerate the timeline. The DOE said it will implement the remaining benefits of the plan, however, in July.

Launched last August, the SAVE student loan plan is an income-driven repayment (IDR) plan that calculates a borrower’s monthly payment using monthly income and family size as key determiners.

The latest action brings the administration's total student debt cancellation, under various programs, to almost $138 billion for nearly 3.9 million borrowers. This includes $4.8 billion in loan forgiveness for roughly 80,000 Americans in December 2023 as well as $9 billion in loan forgiveness for about 125,000 Americans in October 2023 — both through fixes to IDR and Public Service Loan Forgiveness programs.

President Joe Biden launched the program following the Supreme Court's decision last June to reject his sweeping $400 billion student loan debt relief plan, a key part of his campaign promise to help borrowers get out of debt. Last October, federal student loan payments resumed after a three-year, pandemic-induced hiatus.

The DOE's Federal Student Aid Office offers a step-by-step guide on repaying student loans with tips including how to review your loan balance, choose a repayment plan based on your income as well as various loan forgiveness options.

Other government resources include the DOE's Benefits.Gov, which a wealth of information on various loan programs offered by the federal government.

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The Biden administration plans to forgive $9 billion in student loan debt for about 125,000 Americans “through fixes to income-driven repayment (IDR) and Public Service Loan Forgiveness, and by canceling debt for borrowers with total and permanent disabilities,” the White House announced on October 4.

The $9 billion in forgiven loans consist of $5.2 billion in debt relief for 53,000 borrowers under the Public Service Loan Forgiveness program, nearly $2.8 billion in new debt relief for about 51,000 borrowers through fixes to income-driven repayment, and $1.2 billion in relief for about 22,000 borrowers who have a total or permanent disability.

The announcement came just days after the October 1 resumption of student loan repayments after a three-year hiatus.

The borrowers who qualified for relief from fixes to IDRs had made 20 years or more of payments, “but never got the relief they were entitled to,” the White House said. It added that the borrowers with total or permanent disabilities were identified and approved for discharge through a data match with the Social Security Administration.

The administration has now approved $127 billion in debt cancellations for nearly 3.6 million borrowers to-date, the White House said.

Earlier this year, the Supreme Court struck down President Joe Biden’s signature loan forgiveness plan. The administration had wanted to forgive up to $10,000 of student loan debt for eligible borrowers, and up to $20,000 in student loan debt for eligible Pell Grant recipients. 

Since then, however, the administration has forgiven some student debt in several areas. These include the cancelling of $37 million in debt last month for about 1,200 students enrolled at the University of Phoenix, which was found to have a national ad campaign that misled prospective students.

Loan repayments begin

To prepare to start paying your student loans back, you’ll want to start by getting the facts straight by logging into your account at StudentAid.gov to review the list of all your federal loans, as Kiplinger previously reported. Check your loan details, make sure your contact information is correct, and review your financial information to make sure everything is up-to-date.

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If you’re among the millions of borrowers who took advantage of the hiatus on federal student loan payments, it’s time to tighten your belt. With the Supreme Court’s June decision to strike down President Joe Biden’s student loan forgiveness plan — which would have given qualifying borrowers up to $20,000 in federal student debt relief — and repayments beginning in October, you’ll need to make monthly payments again soon.

The thought of parting with that cash might evoke the same sense of dread you felt during your final exams in college. Yet, just as in those college days, the more you prepare, the better off you’ll be. 

Get the facts straight on student loan payments

A lot has happened since loan payments and interest accrual were first suspended in early 2020: A pandemic swept the globe, a new U.S. president took office, and civilians went on the first trip to space without any professional astronauts. Much has likely happened in your personal life as well. Perhaps you moved, landed a new job or got married. Maybe all three. 

In the meantime, there’s a good chance you may not remember who your student loan servicer is or how much you owe. In addition, your home address, e-mail address and bank information may have changed. On top of that, you may have a new loan service provider or platform. More than 17 million accounts for federal student loans have been transferred, and more transfers — either to different servicers or different servicing technology platforms — are expected in the coming months, ultimately reaching more than 30 million accounts, according to a June report from the Consumer Financial Protection Bureau. 

Start by logging in to your account at StudentAid.gov to review the list of all your federal loans and get details about them, such as the service provider’s name, how much you’ve paid, and your remaining balance. Make sure your contact information is correct so you’ll receive important notices. You should also go to your service provider’s website to review the financial information there and, if needed, update your personal data. 

Listing accurate contact information is crucial, says Mark Kantrowitz, a student loan expert and author of How to Appeal for More College Financial Aid. “The repayment is going to restart regardless of whether you get those notices or not,” he says. “If you miss a payment or you’re late, you’ll be charged penalties, and the interest will accrue.”

If you can’t find answers to your questions online, call the Federal Student Aid Information Center (FSAIC) at 800-433-3243 or your loan provider for assistance. Congress didn’t approve a call-center-related funding request from the Department of Education, so hours of operation have been cut. Don’t procrastinate on making this call, or you may need to wait to get a live person on the line.

Reassess your budget to pay student loans

During the pause in payments, many borrowers used funds previously designated for student loans for other purposes. It’s now time to take a hard look at where your money is going and, if necessary, slash your expenses. Track your spending for a month and scrutinize those numbers, Kantrowitz recommends. Determine what is need-based, or mandatory, and what is want-based, or discretionary. Some of those discretionary purchases may have to go by the wayside so you can afford your loan repayment. 

Make sure you’ve signed up to have payments transferred from your bank account to the loan servicer automatically. With automatic payments, not only are you less likely to be late with a payment, but you’ll also get a quarter of a percentage point interest rate reduction. 

Review your student loan repayment options

The DoE offers several repayment options, each with its own nuances. They include the standard repayment plan, the graduated repayment plan and income-driven repayment plans (IDR). With IDRs, payments are based on your income.

Your loan servicer or a financial adviser can walk you through your choices and explain the pros and cons of each. The DoE’s loan simulator is also a useful tool. It will let you see the plans you might qualify for and help you estimate your monthly and total loan payments. 

To protect against pay cuts, furloughs and unemployment, federal loan borrowers may want to consider an IDR plan, says Ross Riskin, chief learning officer at the Investments & Wealth Institute. You can adjust your monthly payments — to as little as zero if your income is low enough — without having to go through the arduous process of negotiating with a bank or lender, he says. Income-driven plans have additional benefits, such as potential loan forgiveness after 20 to 25 years of payments. However, you may also end up paying more in interest in the long run. 

If you’re already enrolled in an IDR plan, compare your current income to what it was the last time you had to recertify, which was likely before the payment pause. If your income is lower now, submit income information to have the monthly payment amount adjusted downward, Riskin says. 

As you explore repayment options, be wary of any offers to refinance, as the only way to refinance a federal loan is to take out a new private loan to pay off the existing student loan balance, Riskin says. Some private loans have variable interest rates, while federal student loans come with fixed rates. Although a private loan may have a lower rate, you’re likely to lose many of the benefits that come with federal loans, such as the potential for forgiveness or forbearance or the opportunity to use repayment plans based on your income. You’ll also lose the opportunity to obtain loan forgiveness under the Public Service Loan Forgiveness (PSLF) program.

The PSLF program is designed for those who work in public service in federal, state, tribal or local government or for a nonprofit organization. The program forgives the remaining balance on certain loan plans after you’ve made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for an eligible employer. You can determine whether your employer qualifies for PSLF by typing in your organization’s name on the PSLF website.

Cushion the blow

In addition to PSLF, there are other ways an employer can help you foot your student loan bill. Under an updated provision in the Coronavirus Aid, Relief and Economic Security (CARES) Act, employers can provide annual educational assistance of up to $5,250 per employee to help repay qualifying student loans. The money is free from federal income taxes, too.

And starting in 2024, employers will be able to make matching contributions to retirement plans such as 401(k) and 403(b) accounts for employees who make qualified student loan payments of a certain amount on an annual basis. 

You can also soften the economic blow by earning more money. It’s still a tight labor market, so now could be a good time to make your case for a raise. Just keep in mind that if you’re in an income-based student loan plan and make more money, your monthly loan payment may increase after you recertify your income. 

Where to get help with student loans

If you have crunched the numbers and investigated ways to get additional cash but money is still tight, you still have options. Ask your loan provider whether you should consider unemployment deferment, economic hardship deferment or forbearance.

You must be out of work to qualify for unemployment deferment. You may qualify for economic hardship if you’re receiving federal or state public assistance, you’re a Peace Corps volunteer, you’re working full-time but earn the federal minimum wage or less, or you have income that’s less than or equal to 150% of the poverty line for your family size and state ($29,580 for a two-person household).

With forbearance, principal payments are postponed, but interest continues to accrue. You can pay the interest as it accrues or allow it to accrue and be added to your loan principal balance at the end of the forbearance period. 

Both of the deferment options, as well as general forbearance, are available for up to three years, and you can use a combination of deferments and forbearance for up to nine years. 

Repaying federal student loans may feel stressful, but ignoring your obligation will add even more angst to your life in the long term. If you don’t make payments, the loan will eventually go into default, which can have disastrous consequences. Your credit will be ruined, which will affect all other outstanding debts and make it hard to get any other loans. Worse, your wages can be garnished up to 15%, and if you’re still in default when you retire, your Social Security benefits can be offset up to 15%. 

“Don’t take the ostrich approach,” says Kantrowitz. “If you ignore the problem, it just gets worse.” 

Help for borrowers who fell behind

If you were one of the 7 million borrowers in default before the federal loan payment pause, there’s good news for you. A Department of Education program called the Fresh Start initiative will set your loan status as current on payments, restore your eligibility for federal student aid and remove the default from your credit history. Opting in to Fresh Start can have far-reaching positive effects. Your credit score could increase, enabling you to get lower interest rates on a variety of loans, from mortgages to car loans. 

Note that Fresh Start has a time limit: You must make payment arrangements within one year of the end of the payment pause. To take advantage of the program, contact your loan holder or the DoE. For more in­formation, you can also call the DoE’s Default Resolution Group at 800-621-3115. Keep in mind that if you don’t make payments after a year, the loans will go back into default.

Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Legal challenges have been against President Biden’s student loan forgiveness plan since it was introduced last year. The plan was to offer up to $10,000 of student loan debt relief for eligible borrowers, and up to $20,000 in student loan forgiveness for Pell Grant recipients. Two of those legal challenges have made their way to the U.S. Supreme Court, who will ultimately decide whether the Biden Administration has the legal authority to forgive any student loans. In the meantime, it’s unclear whether you can still opt out of student loan forgiveness–something the Department of Education said that you could do last year. 

Why You Could Opt Out of Student Loan Forgiveness

The idea that you could opt out of student loan forgiveness came from the very first student loan debt relief lawsuit. That case was brought by the Pacific Legal Foundation, a libertarian group in California. The organization argued that student loan borrowers in states that could or will tax forgiven student loan debt would be worse off than other borrowers, because of Biden’s student loan forgiveness. However, the Department of Justice said that federal student loan forgiveness doesn’t create an “automatic” tax penalty because borrowers aren’t required to have their student loans forgiven.

Why does this matter? Well, the Pacific Legal Foundation’s challenge raised important questions concerning states that will or might tax forgiven student loan debt (you might live in one of them), and whether you have to accept student loan debt forgiveness.

The lead plaintiff in the student loan debt relief case was a Pacific Legal Foundation attorney, Frank Garrison. Garrison argued that an Indiana state tax on forgiven student loan debt would amount to immediate tax liability and an unfair penalty. As an Indiana taxpayer, he asked the court to invalidate President Biden’s student loan debt cancellation program and pointed to at least six other states where, Garrison said, borrowers could be similarly harmed.

The federal government responded to the lawsuit by saying that borrowers, who are eligible for so-called “automatic” debt relief, could opt out of Biden’s student loan forgiveness plan, and avoid paying state taxes on the canceled debt. In other words, “you can keep you student loan debt—if you want to.”

As a result of the opt-out, a federal judge denied Pacific Legal Foundation’s motion to block President Biden’s student loan forgiveness and dismissed the organization's claim.

But this case means that going forward, it could be difficult for a borrower to claim that state tax has been unfairly or automatically imposed merely because of Biden’s student loan relief. The student loan forgiveness opt out basically allows the federal government to say that the borrower chooses whether to have forgiven student loan debt in the first place. That would make any tax “penalty” a state issue.

Another challenge with this case is that the lead plaintiff, Garrison, hadn’t yet paid any state tax on forgiven student loan debt. So, it was unclear whether there’s sufficient legal harm to justify stopping President Biden’s student loan forgiveness program. However, that could potentially change if student loans are forgiven and some states impose tax liability on the cancelled debt.

Will Your State Tax Forgiven Student Loan Debt?

You may be wondering why someone would want to decline $10,000 to $20,000 of student loan debt forgiveness. There could be many reasons, but this particular legal case pointed to the idea that borrowers in states that will or could tax student loan forgiveness might not want to pay additional state taxes.

Right now, whether some states will tax forgiven student loans (if the Supreme Court doesn’t strike down the plan) is an evolving situation. A few states have confirmed that they will tax canceled student loan debt.  In Indiana (where the lead plaintiff in the Pacific Legal Foundation case reportedly resides), the potential tax on $10,000 of forgiven student loan debt could be as high as $1,000.

If you live in Mississippi, as another example, the maximum amount of state tax liability could be $500. However, those calculations assume that you are eligible for the full $10,000 of loan forgiveness for individuals with income under $125,000 a year. And if you are a Pell Grant recipient in a state that could or will tax forgiven student loan debt, and are eligible for up to $20,000 in student loan relief under President Biden’s plan, your state tax liability could be higher.

There are other states that could or will tax forgiven student loan debt. However, as of now, if student loan forgiveness goes forward, most states plan to conform to the Federal government’s stance that most forgiven student loan debt is not taxable through 2025.

How to Apply for Student Loan Forgiveness

Applications for Student Loan Forgiveness are on hold. Previously, on its website, the Department of Education had said that  if borrowers wanted to opt out of student loan debt relief for any reason, that they would be given an opportunity to do so. However, given the lawsuits over student loan relief  at the Supreme Court, it’s unclear at this point, exactly how opting out of student loan debt relief will work or whether it will be relevant at all.

Stay tuned to Kiplinger for updates on student loan forgiveness and sign up for updates from the U.S. Department of Education if you have any questions.

President Biden’s original student loan debt forgiveness plan was put on hold due to legal challenges. But ever since the U.S. Supreme Court struck down that plan, the Biden administration found other ways to forgive billions of dollars in student loan debt.

But another important tax question persists for those who've had their debt forgiven: will you have to pay state taxes on your forgiven student loan debt?

The answer to whether you will owe state taxes because of student loan forgiveness depends on where you live. That’s because some states' laws regarding the tax treatment of forgiven debt do not conform to the federal government’s current stance on student loan relief.

As a result, it’s important to have information about those states and to know what state tax liability for student loan relief could mean for you.

Is student loan forgiveness taxable?

To understand whether student loan forgiveness will trigger an unexpected state tax bill, it helps to know why certain student loan forgiveness isn’t taxable at the federal level.

During the COVID-19 pandemic, the American Rescue Plan Act (ARPA) became law, and effectively made student loan forgiveness nontaxable, for federal income tax purposes, through 2025.

That’s a change from the general rule that you may have known from the past — i.e., that the IRS typically considers forgiven debt to be taxable for federal income tax purposes.

Also, when the Biden administration first announced student loan forgiveness a few years ago, the White House confirmed that student loan relief under the program (which ended up on ice due to court challenges) wouldn't be taxable to you as income on federal tax returns.

Will you pay state taxes on your forgiven student loan?

While you won’t likely be taxed at the federal level for student loan debt cancellation, some states could or will tax the amount of student loan forgiveness you receive.

Those states include Arkansas, California, Indiana, Minnesota, Mississippi, North Carolina, and Wisconsin.

The reason why some of these states might consider forgiven student loan debt to be taxable income has to do with a concept called conformity.

Basically, when the federal government enacts laws — in this case, laws that impact the Internal Revenue Code — many states readily conform relevant statutes, rules, and regulations to the new federal tax treatment.

Some of these states could still pass legislation to conform the the federal stance.

So, what does that mean for you? Data show that tax liability for student loan forgiveness in various states could range from a little over $500 to as much as $1,100.

So, if you live in Mississippi, for example, the maximum amount of state tax liability based estimates would be around $500. (That calculation assumed that you are eligible for $10,000 of loan forgiveness.)

Using Mississippi again, $20,000 of student loan forgiveness could result in $1,000 of state tax liability.

While this doesn’t seem like good news, it should be noted that some of the states could find a legislative way to exclude student loan forgiveness from taxable income.

What should you do?

At this point, you can stay tuned to information on the status of student loan forgiveness.

And if you live in one of the nine states with no income taxes, you don’t have to worry about student loan forgiveness (if the program is allowed to go forward) being treated as income on your state tax return.

However, if you live in one of the states that could or will tax student loan forgiveness and the forgiveness program ends up moving forward, you will want to stay tuned to any guidance or information that is made available on the issue.

For example, in the past, the Department of Education said that some borrowers could opt out of student loan debt relief. That and other guidance, which could change, could help you know how student loan debt relief (if you get it) will affect your state taxable income — or your next tax bill.

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After the U.S. Supreme Court struck down the Biden administration's proposal for widespread student loan forgiveness, the administration has acknowledged that many of the more than 40 million student loan borrowers in the United States struggle with repayment.  

Since President Biden took office, the U.S. Department of Education says it has forgiven nearly $160 billion in federal student loan debt, benefiting approximately 4.6 million borrowers. Several aid programs have contributed to the total debt relief, each targeting different borrower groups and circumstances. 

Here is a summary of some of these programs to help you determine what the Biden administration's student loan forgiveness efforts mean for you.

Student loan forgiveness 2024

Before diving into the various loan forgiveness plans, it helps to review some background. 

During the COVID-19 pandemic, the Biden administration unveiled a broad student loan forgiveness plan. The plan proposed forgiving up to $10,000 of student loan debt for eligible borrowers and up to $20,000 for Pell Grant recipients. Eligibility criteria included an individual income of less than $125,000 or $250,000 for married borrowers filing jointly.

However, the plan faced legal challenges and was ultimately struck down by the U.S. Supreme Court in Biden v. Nebraska.

In response, the Biden administration announced new protections for student loan borrowers. Since then, the Department of Education has automatically forgiven student loan debt for some in public service or who were defrauded. Other student loan forgiveness is due to changes to income-driven repayment plan rules.

Related: Biden Cancels $1.2B in Student Loan Debt

What is Borrower Defense loan discharge?

One student loan debt relief initiative is the Borrower Defense to Repayment program, which the administration says has led to the discharge of over $28 billion in debt for 1.6 million borrowers.  

This program generally canceled student loan debt for borrowers who were misled by their schools or received a subpar education.

For more information, see How Borrower Defense to Repayment Loan Discharge Works.

Income-Driven Repayment plans: Who qualifies for IDR loan forgiveness?

Income-driven repayment (IDR) plans generally allow borrowers to pay a percentage of their discretionary income toward their student loans each month. (The remaining debt is forgiven after a specified period.) 

There are four available IDR plans and the terms vary, but each is designed to make repayment more manageable for borrowers with lower incomes. The IDR plans are the Pay As You Earn (PAYE) repayment plan, the Income-Based Repayment (IBR) plan, the Income-Contingent Repayment (ICR) plan, and the Saving on a Valuable Education (SAVE) repayment plan.

The Biden administration has reviewed millions of loan accounts to help ensure borrowers receive any loan forgiveness they may be entitled to. Earlier this year, as Kiplinger reported, the administration forgave $1.2 billion in student loan debt for borrowers enrolled in the SAVE repayment plan. 

More to know about IDR

• The Biden administration has implemented a one-time payment count adjustment for borrowers consolidating their loans.  According to the administration, this adjustment initiative has benefitted nearly one million borrowers. 
• This adjustment credits borrowers based on the loan with the longest repayment history. This includes periods previously ineligible, like months in deferment or forbearance. 
• Some borrowers must consolidate loans before June 30, 2024, to qualify for these account adjustments.

Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program is designed to forgive the federal student loans of borrowers employed by the government or certain non-profit organizations after ten years of on-time payments. 

A PSLF help tool on studentaid.gov provides a list of qualifying employers and access to the employer certification form.

• The Biden administration has expanded eligibility and allowed certain borrowers to reapply for relief. 
• These efforts have reportedly led to the forgiveness of over $62 billion in student loan debt.

Total and Permanent Disability (TPD) Discharge

The Biden administration has also forgiven the student debt of some borrowers with disabilities. More than half a million borrowers have received over $14 billion in relief through the Total and Permanent Disability Discharge program, according to the White House. 

• Borrowers generally qualify for a TPD discharge if they have a severe and permanent disability that prevents them from working. 
• According to the TPD program web page, you can show that you qualify for a TPD discharge by providing documentation from one of three sources: the U.S. Department of Veterans Affairs (VA), the Social Security Administration (SSA), or an authorized medical professional.

Taxes on student loan forgiveness?

Some legal challenges still surround various student loan forgiveness efforts. For example, a federal appeals court recently dismissed a challenge to $51 billion in already-granted debt relief. The Biden administration has pledged to continue looking for ways to help student loan borrowers.

At the same time, the IRS has encouraged employers and employees to consider employer education assistance programs. As Kiplinger reported, employer-provided funds from these programs (of up to about $5,200 per employee) are a tax-free way to help borrowers repay their student loans.

Also, remember that while student loan forgiveness isn’t currently taxable at the federal level, some states may tax your forgiven student loan debt. If you are worried about how student loan forgiveness may affect your tax burden, consult a qualified and trusted tax professional or financial advisor.

New student loan forgiveness plans 

Recently, the Biden-Harris administration announced new plans for additional student debt relief. If approved, the proposal would:

• Waive accrued and capitalized interest for millions of borrowers
• Automatically discharge debt for borrowers who are eligible for loan forgiveness under the SAVE Plan despite not being enrolled in the plan
• Eliminate student debt for borrowers who entered repayment 20 or more years ago
• Help borrowers who enrolled in low-financial-value programs or institutions
• Assist borrowers who experience hardship in paying

Public comments on the first set of plans closed May 17. The Department of Education plans to publish final rules this fall.

Student loan debt: Bottom line

As these initiatives unfold, borrowers should explore their options and use available resources to help manage student loan payments and debt. For example, on your federal income tax return, you may be able to deduct student loan interest paid during the year.

Also, remember that these federal; student loan forgiveness plans don't apply to private student loans. Those loans are typically issued by financial institutions like banks and credit unions, not the U.S. Department of Education.

Learn more about student loan forgiveness by visiting studentaid.gov.

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COVID-related shutdowns and restrictions have hit small businesses particularly hard. Many of them have closed permanently, while others are hanging on by their fingernails. Fortunately, there is some help available through the Paycheck Protection Program (PPP), which was first introduced in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Under the PPP, small businesses can get up to 24 weeks of cash flow assistance through federally guaranteed loans. Plus, the loans can be forgiven to the extent the proceeds are used for payroll and certain other expenses during the COVID-19 pandemic. Borrowers can apply for a PPP loan through any existing Small Business Administration 7(a) lender or through any federally insured bank, credit union, eligible nonbank lender, or Farm Credit System institution that is participating in the program.

The PPP has an up-and-down history, though. For instance, initial PPP funding – roughly $349 billion – was exhausted just a few days after the program was launched. Some mom-and-pop businesses had a hard time getting loans, too. But Congress later provided an additional $310 billion in funding and made important changes to the program, such as allowing more time to spend the loan proceeds and making it easier to get a loan fully forgiven. However, new PPP loan applications then were halted on August 8, 2020 – until a second stimulus package was signed into law in December 2020 that restarted the program with an additional $285 billion in funding. The law also opened up a second PPP loan for businesses that used up all the proceeds of their first PPP loan. The relief bill signed into law on March 11, 2021, injected an additional $7.25 billion into the program.

As it stands right now, the PPP will run until May 31, 2021, or until funds are exhausted, whichever occurs first. So, there's still time to tap into this form of assistance. Although uncertainty and confusion have surrounded the PPP since its launch, that shouldn't stop small business owners from participating in the program. Yes, there are a lot of rules and procedures you need to follow. But getting familiar with the PPP basics is a good place to start. That's what the following overview is designed to do.

Small businesses that didn't received a PPP loan in 2020 under the CARES Act may apply for a "first draw loan." Existing PPP borrowers that didn't receive loan forgiveness by December 27, 2020, may reapply for a first draw PPP loan if they previously returned some or all of their first draw PPP loan funds. A borrower who received the full available benefit of a first draw loan in 2020 under the CARES Act may only be eligible for a second draw PPP loan.

To be eligible for a first draw PPP loan, a borrower must have been in operation on February 15, 2020, and either (1) had employees for whom it paid salaries and payroll taxes, (2) paid independent contractors, or (3) operated as a self-employed individual, independent contractor or sole proprietorship with no employees. The borrower must also be either a:

• Small business that, together with affiliates (if applicable), have 500 or fewer employees;
• Business with more than 500 employees that meets the SBA's size standards (either the industry size standard or the alternative size standard);
• 501(c)(3) or 501(c)(19) organization with 500 or fewer employees per physical location;
• 501(c)(5), 501(c)(7) or 501(c)(8) organization with 300 or fewer employees per physical location that doesn't receive more than 15% of its receipts from lobbying activities;
• Tribal business concern;
• Nonprofit news organization;
• Online news publisher;
• Housing cooperative with no more than 300 employees; or
• 501(c)(6) organization or a destination marketing organization with 300 or fewer employees.

Borrowers can use first draw PPP loans for the following purposes:

• Payroll costs (salaries; wages; vacation, parental, family, medical or sick leave; and health benefits);
• Mortgage interest;
• Rent;
• Utilities (electricity, water, sewage, telephone, internet, transportation costs, etc.);
• Operations expenditures (e.g., any software, cloud computing, or other human resources and accounting needs);
• Property damage costs (e.g., from damages due to public disturbances that occurred in 2020 and not covered by insurance);
• Supplier costs (e.g., any purchase order or order of goods made before receiving a PPP loan essential to operations); and
• Worker protection expenditures (e.g., any personal protection equipment or property improvements to remain in compliance with government requirements or guidance established by the Department of Homeland Security, Centers for Disease Control and Prevention, Occupational Safety and Health Administration, or any state or local agency related to worker safety due to COVID-19).

As of January 2021, certain eligible borrowers that previously received a PPP loan can apply for a "second draw loan" with the same general loan terms and conditions as the first draw PPP loan (see above).

There are, however, some important differences. Each borrower must be an eligible recipient of a first-draw PPP loan and, together with its affiliates, have no more than 300 employees. The borrower must also be able to demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

Borrowers seeking more than $150,000 must submit documentation, such as annual tax forms or quarterly financial statements, at the time of their application to support the 25% reduction in revenue relative to 2019. Borrowers that receive less than $150,000 must provide such documentation when applying for loan forgiveness.

Up to 100% of the principal amount of a PPP loan and accrued interest can be forgiven. Both first and second draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during covered period following the loan disbursement:

• Employee and compensation levels are maintained in the same manner as required for the first draw PPP loan;
• The loan proceeds are spent on payroll costs and other eligible expenses; and
• At least 60% of the proceeds are used for payroll costs.

A borrower may choose a covered period between 8 weeks and 24 weeks after the receipt of PPP funds from the lender.

To have all or part of a PPP loan forgiven, a borrower must complete and submit a loan forgiveness application. Borrowers also need to keep records and have accurate bookkeeping to prove their expenses during the loan period. When the covered period is over, borrowers must apply for forgiveness through their lender. Use SBA Form 3508, Form 3508EZ, or Form 3508S (Forms 3508EZ and 3508S are shorter versions of the application for borrowers who meet specific requirements).

Some lenders may have their own forgiveness forms, too. So, borrowers should check with their lender to determine which form is the right one for their loan. After a borrower applies for forgiveness, the lender must provide a response within 60 days.

For first-time borrowers, the maximum loan amount is 2½ times their average monthly 2019 or 2020 payroll costs up to $10 million. Borrowers applying for the first time may use either calendar year 2019 or calendar year 2020 for purposes of calculating their average payroll costs.

The maximum loan amount of a second draw PPP loan is 2½ times the borrower's average monthly 2019 or 2020 payroll costs up to $2 million.

For borrowers in the accommodation and food services sector (NAICS Code 72), the maximum loan amount for a second draw PPP loan is 3½ times the borrower's average monthly 2019 or 2020 payroll costs up to $2 million.

Normally, cancelled debt is generally considered taxable income. However, the CARES Act says that any forgiven PPP loan amount won't be taxed.

The IRS originally ruled that borrowers couldn't claim a tax deduction for business expenses that result in forgiveness of a PPP loan. However, Congress reversed that decision in December. As a result, tax deductions are allowed for the payment of eligible business expenses even if the payments would result (or be expected to result) in the forgiveness of a PPP loan.

The Biden administration has announced some tweaks to the Paycheck Protection Program (PPP) meant to boost access to the forgivable loans for mom-and-pop businesses.

The Small Business Administration will soon accept applications for PPP loans exclusively from businesses and nonprofits with fewer than 20 employees, for a period of 14 days. The SBA says that the share of the program's funding going to businesses with fewer than 10 employees is up nearly 60% when compared with the same point in the program last year. But the Biden administration wants to further target the PPP to the smallest businesses. The 14-day period will start on Wednesday, February 24, 2021, at 9:00 am.

The SBA will also allow sole proprietors, independent contractors and self-employed individuals to receive more financial support. These types of businesses, which include home repair contractors and small independent retailers, make up a significant share of all businesses. The SBA will revise the PPP's calculation formula for these applicants so that it offers more relief.

The SBA is eliminating the restriction that prevents small-business owners who are delinquent on their federal student loans from getting a PPP loan. Currently, the PPP is not available to any business with at least 20% ownership by an individual who is currently delinquent or has defaulted within the past seven years on a federal debt, including a student loan.

The agency will also eliminate the restriction that disqualifies small-business owners with prior non-fraud felony convictions from getting a PPP loan – a move with broad bipartisan support. The SBA has also clarified that small-business owners who are not U.S. citizens, but are lawful U.S. residents, may use their Individual Taxpayer Identification Number to apply for a loan. These changes will be implemented by the first week of March.

Congress provided $284 billion for the latest round of PPP loans under the coronavirus relief package passed in December. As of February 18, less than half of those funds have been used.

Congress recently passed a $900 billion COVID-19 relief bill that pumps billions of dollars back into the popular Paycheck Protection Program (PPP) that ended in early August. Under the PPP, small businesses can borrow money from private lenders without collateral, personal guarantees or fees. The loans don't have to be repaid to the extent they're used to cover certain expenses, and they provide an important lifeline to businesses that are struggling financially during the coronavirus pandemic.

The bill requires the Small Business Administration (SBA) to write regulations implementing the PPP no later than 10 days after the bill is signed into law. Once the SBA issues the regulations, the program will officially reopen and run through March 31, 2021.

The legislation also ensures that business expenses paid with forgiven PPP loans are tax deductible. It also clarifies that PPP loans will not be included in taxable income.

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Who Can Apply?

Many small businesses, non-profits and independent contractors may be eligible for the new round of PPP loans. Borrowers may also qualify for a loan even if they received funds in the PPP's first round. There will be $284.5 billion in forgivable PPP loan funds available for certain borrowers that already got PPP loans and for other businesses that missed out in the previous round.

The bill created "second draw" forgivable loans for "harder hit" small businesses, certain non-profit organizations, housing cooperatives, sole proprietors, independent contractors and others with 300 or fewer employees. Qualified borrowers must show a loss of at least 25% of gross receipts in any quarter during 2020 when compared to the same quarter in 2019.

First-time PPP borrowers will be subject to the program's original eligibility rules.

New Amount for "Second Draw" Loans

The maximum loan amount is $2 million for "second draw" loans. That's down from the $10 million maximum that applied under the original CARES Act rules.

A borrower may qualify for a loan up to 2½ times its average monthly payroll costs. Businesses in the accommodation and food services industries, such as restaurants and hotels, may receive up to 3½ times their average monthly payroll cost.

Loan Forgiveness for the New PPP Loans

As with the previous round of PPP loans, the new loans may be entirely forgiven if spent for the proper purposes (primarily payroll) during the proper time period. Currently, there are three PPP loan forgiveness applications, but these will likely be updated by the SBA once the program officially reopens.

To obtain full forgiveness, borrowers will need to spend at least 60% of loan proceeds on payroll.

Borrowers may spend up to 40% on other qualified expenses during the covered period. In addition to rent, mortgage interest and utilities, the list of eligible non-payroll expenses has been expanded to include four new categories:

• Covered operations expenditures;
• Covered property damage costs;
• Covered supplier costs; and
• Covered worker protection expenditures.

Covered operations expenditures include payments for any software, cloud computing, and other human resources or accounting needs.

Covered property damage costs consists of expenses related to property damage caused by public disturbances in 2020 that are not covered by insurance.

Covered supplier costs are expenditures to a supplier under a contract, purchase order, or order for goods in effect prior to taking out a loan that were essential to the borrower's operations when the expenditure was made.

Covered worker protection expenditures include payments for personal protective equipment and adaptive investments to help a borrower comply with federal health and safety guidelines, or any equivalent state and local guidance, related to COVID-19 from March 1, 2020, to the end of the national emergency declaration.

Simplified Loan Forgiveness

For any loan up to $150,000, the covered loan amount will be forgiven if the borrower submits a one-page online or paper form listing the loan amount, the number of employees retained and the amount of the loan spent on payroll. Congress has directed the SBA to release this form within seven days after the enactment of the new bill.

Choice of Covered Period

The bill will also allow borrowers to select the end date of their covered period during which they are required to spend a sufficient amount on qualified expenses to receive forgiveness. However, it must be greater than eight weeks from the date of disbursement and not more than 24 weeks.

The COVID-19 pandemic has hit U.S. small businesses very hard. In March, Congress created the Paycheck Protection Program as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to save jobs and prop up struggling businesses during the pandemic. Under the PPP, small businesses could borrow up $10 million from private lenders without collateral, personal guarantees, or fees. These loans don't have to be repaid to the extent they're used to cover the first 24 weeks (eight weeks for those who received their loans before June 5, 2020) of the business's payroll costs, rent, utilities and mortgage interest. However, at least 60% of the forgiven amount must be used for payroll.

The PPP ran from early April through early August. In total, more than $525 billion has been distributed to more than 5 million small businesses. One reason the PPP was so attractive to borrowers was the potential to turn these loans into grants. The program, however, has been criticized for problems with its rollout and the complicated process of getting loans forgiven.

The Small Business Administration began processing loan forgiveness applications on October 2. As of late September, lenders have submitted about 96,000 forgiveness applications to the SBA. Those applications represent about 2% of all PPP loans.

Simplified Loan Forgiveness for Smaller Loans

After much speculation about legislation to provide automatic PPP loan forgiveness for certain loans, the SBA recently acted on its own to give some relief to some borrowers, since an automatic forgiveness bill has yet to move forward in Congress.

Recipients of PPP loans of $50,000 or less can apply for forgiveness using a simplified application that was released by the Treasury Department and the SBA on October 8. A borrower that, together with its affiliates, received loans totaling $2 million or greater may not use the new form to apply for forgiveness.

The SBA says that out of a total of 5.2 million PPP loans that the agency has approved, roughly 3.5 million were loans of $50,000 or less.

The new application streamlines the forgiveness process for PPP borrowers by doing away with complicated full-time equivalence (FTE) or salary reduction calculations.

The new SBA loan forgiveness application (Form 3508S) requires fewer calculations and less documentation for eligible borrowers than the two other forms – SBA Forms 3508 and 3508EZ. This is primarily because businesses that borrowed $50,000 or less are exempt from the CARES Act provisions that impose a reduction penalty if the borrower reduced FTE employees or the salary or wages of employees during the covered period.

Businesses that borrowed $50,000 or less will still have to certify that:

• Funds were used for eligible expenses;
• Payroll costs were at least 60% of the forgiveness amount; and
• They meet the owner-employee's limitations and caps.

Borrowers also need to provide documentation that supports the eligible payroll and nonpayroll payments from the covered period, such as:

• Tax forms;
• Payment receipts, cancelled checks, or account statements documenting the amount of employer contributions to employee benefit plans;
• Copies of lender amortization schedules and receipts or cancelled checks verifying eligible payments from the covered period;
• Business rent or lease payments; and
• Business utility payments.

The supporting documentation must be retained for six years after the date the loan is forgiven or repaid in full.

The PPP has undergone many changes since it was first created. These might not be the last changes to the program. Nevertheless, borrowers who are qualified to use Form 3508S should consider starting the process for loan forgiveness as soon as possible, as they're unlikely to see additional program changes. Given the large volume of outstanding PPP loans, both lenders and the SBA may become overwhelmed with an influx of forgiveness applications.

For small business owners who scored a loan through the Paycheck Protection Program (PPP), not having to pay back what they borrowed is a huge bonus. Under the CARES Act (as modified by the Paycheck Protection Program Flexibility Act (PPPFA) in June), the PPP lets small businesses borrow up $10 million without collateral, personal guarantees, or fees. The loan doesn't have to be repaid to the extent it's used to cover the first 24 weeks (eight weeks for those who received their loans before June 5, 2020) of the business's payroll costs, rent, utilities and mortgage interest. However, at least 60% of the forgiven amount must be used for payroll. Small-business owners have until August 8, 2020, to apply for PPP loans and until December 31, 2020, to use the funds.

To have their PPP loans forgiven, small-business owners must first submit an 11-page application to the bank or lender that approved their initial loan request. The application, along with other recently released guidance from the SBA, answers a lot of questions about repaying loans that were on the minds of small-business owners. Here are 8 important tips and warnings on PPP loan forgiveness gleaned from the application and new SBA guidance. Hopefully, this information will help prop up the bottom line for a lot of small businesses.

Since the 24-week covered period doesn't always align with a business's payroll cycle, the SBA is offering an "alternative payroll covered period" for borrowers with a biweekly or more frequent payroll schedule. As a result, borrowers may calculate eligible payroll costs using the 24-week period that begins on the first day of the pay period after loan disbursement, rather than the first day of disbursement.

Example: If a hair salon received its PPP loan proceeds on Monday, June 8, and the first day of its first pay period following its PPP loan disbursement is Sunday, June 14, the first day of the alternative payroll covered period is June 14 and the last day of the alternative payroll covered period is Sunday, November 29.

Borrowers are eligible for forgiveness of payroll costs paid and incurred during the 24-week covered period (or the alternative covered period). However, payroll costs incurred, but not paid, during the borrower's last pay period of the 24-week period are eligible for forgiveness only if they're paid on or before the next regular pay period.

Eligible non-payroll costs must be paid or incurred during the 24-week coverage period. For expenses incurred but not paid during this period, they must be paid on or before the next regular billing date, even if that date is after the 24-week period. That said, the SBA has reiterated that no advance payments of interest on mortgages will be eligible for loan forgiveness, but it hasn't specifically addressed whether the prepayment of payroll costs, rent, and utilities are forgivable.

The CARES Act defines the term "payroll costs" broadly to include compensation in the form of salary, wages, commissions, or similar compensation. As a result, employee bonuses and hazard pay are eligible for loan forgiveness as payroll costs, as long as the employee's total compensation does not exceed $100,000 on an annualized basis. These payments constitute a supplement to salary or wages and, therefore, are a similar form of compensation.

The amount of a PPP loan that is forgiven is generally reduced if the borrower cuts back on the number of "full-time equivalent" (FTE) employees during the 24-week covered period. However, the CARES Act does not define an FTE employee.

Since this is an important omission, the SBA has determined that an FTE employee is an employee who works 40 hours or more, on average, each week.

For employees who were paid for less than 40 hours per week, borrowers can choose to calculate the full-time equivalency in one of two ways. First, borrowers can calculate the average number of hours the worker was paid per week during the 24-week covered period and divide the number by 40. For example, if an employee was paid for 30 hours per week on average during the 24-week period, the employee would be an FTE employee of 0.75. Second, a borrower can elect to use a full-time equivalency of 0.5 for each employee who on average worked less than 40 hours per week during the 24-week period. Borrowers can select only one of these two methods and must apply it consistently to all their part-time employees.

There are a few exceptions to reduction of loan forgiveness when a small business decreases the number of FTE employees during the 24-week covered period. First, according to the SBA, a borrower will not be penalized for FTE reductions for employees who were fired for cause, voluntarily resigned, or requested a reduction of their hours.

A borrower is also exempt from the loan forgiveness reduction rules if it lowered FTE employee levels between February 15 and April 26, 2020, but restored the FTE employee level by December 31, 2020, to the level that existed during the pay period that included February 15, 2020. Employees that are laid off after April 26, 2020, will result in an FTE reduction even if they are rehired by the end of 2020.

There's also an exemption based on employee availability that runs from February 15 to December 31, 2020. Under this exemption, the FTE reduction is eliminated if a business can document, in good faith:

• An inability to either rehire former employees or hire similarly qualified employees for unfilled positions by December 31, 2020; or
• An inability to return to the same level of business activity at which it was operating before February 15, 2020, because of compliance with OSHA, CDC or HHS guidance during the period beginning on March 1, 2020, and ending on December 31, 2020.

Finally, small businesses will not see a reduction in the loan amount forgiven if workers turn down their old jobs. To qualify for this exemption, the borrower must "have made a good faith, written offer of rehire, and the employee's rejection of that offer must be documented by the borrower." Within 30 days of an employee's rejection of the offer, a business seeking loan forgiveness must notify state unemployment offices of the worker's refusal to return to work.

There's another way that loan forgiveness can be limited – by a reduction in paid salaries or wages of more than 25%. However, there's an exception to this rule.

If there are salary or wage reductions of greater than 25% between February 15 and April 26, 2020, the borrower is exempt from the loan forgiveness reduction rule if the salary or wage reductions are restored by December 31, 2020.

The SBA announced that it can review PPP loans of any size at any time. Borrowers must retain their PPP documents for at least six years after the date the loan is forgiven or paid in full.

While the latest stimulus bill being batted around Congress, the Health and Economic Omnibus Emergency Solutions (HEROES) Act, is stalled in the Republican-controlled Senate, the real heroes battling coronavirus on the front lines continue to fight the good fight.

And it’s here where inaction -- on the bill, which was passed by the Democratic-controlled House of Representative -- so far fails the health care workers and first responders (law enforcement officers, firefighters, paramedics, and emergency medical technicians) it is designed, in part, to help. But just how is the $3 trillion HEROES Act planning to benefit the front-line fighters? Part of the bill includes a $200 billion Heroes’ fund “to ensure that essential workers who have risked their lives working during the pandemic receive hazard pay.”

I have skin in this game. My daughter is a registered nurse whose job, in part, includes taking the temperature of anyone coming to the emergency room at the hospital where she works. So you can be darn sure I’m keeping an eye on the HEROES Act for my hero, and other health care workers and first responders. Here’s some of what the HEROES Act offers them.

Health care workers and first responders, including police and firefighters among essential workers, would be eligible for $13-per-hour pay bumps up to $10,000 (on top of their regular salary) as part of the HEROES Act. The pay would be retroactive to January 27, when the COVID-19 public health emergency was declared, until 60 days after the end of the emergency.

The employer would apply for the grants from the federal government to cover the pandemic premium pay for essential workers. The employees would see a separate line item on their paycheck showing this pandemic premium pay. Your boss would not be allowed to reduce any other pay or benefits because of this. The retroactive pandemic premium pay would come in a lump sum soon after your employer gets the grant. Oh, and yes: it would be taxable.

Included in the HEROES Act is $850 million going to the states to assist essential workers, including health care workers and emergency response workers, for child and adult care help, beginning January 21 of this year. Individual states would decide how the extra funding works; they could directly pay child care (as well as adult care) providers or reimburse workers directly if they pay for care themselves.

Looking for a job in the healthcare industry without the unbearable weight of student loans? The HEROES Act has a path. Included in the bill is the Public Health Workforce Loan Repayment Program, structured to “assure an adequate supply of and encourage recruitment of public health professionals to eliminate critical public health workforce shortages in local, state, territorial, and tribal public health agencies.”

Participants in the program must be accepted into an accredited educational institution or in the final semester of a program leading to a public health degree (health professions degree or certificate or a degree in computer science, information science, information systems, information technology or statistics). Once they accept employment with a public health agency and sign a contract to work there for two years or more, the Public Health Workforce Loan Repayment Program will pay off their student loans up to $35,000 per year of contracted service.

Bonus: Those who have worked in the public health workforce for the last 10 years are also eligible to have their student loans paid off through the Public Health Workforce Loan Repayment Program.

Included in the HEROES Act are disability and death benefits for public safety officers affected by COVID-19 while on active duty. Benefits would apply to public safety officers diagnosed with COVID-19 from January 20, 2020, until one year after the coronavirus emergency period is declared over.

The HEROES Act includes $1.3 billion for the Federal Emergency Management Agency to prevent, prepare for and respond to the coronavirus. Included in that is $500 million to purchase personal protective equipment and related supplies, mental health evaluations, training and decontamination or sanitizing facilities and equipment for firefighters. There’s also $500 million for hiring and retaining firefighters.

The HEROES Act includes $300 million for the purchase of personal protective equipment for law enforcement, as well as for the hiring or rehiring additional career law enforcement officers.

Under the HEROES Act, first responders would be able to take a $500 “above-the-line” tax deduction for unreimbursed expenses for tuition and fees related to professional development or training, or for the cost of uniforms. An "above-the-line" deduction means a deduction you can claim even if you don't itemize.

The Heroes’ Act would allow a $500 “above-the-line” tax deduction for 2020 for the uniforms, supplies, and equipment of COVID-19 front-line employees and first responders.

Small-business owners will be able to get loans under the stimulus bill this week. On March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act. The legislation provides a stimulus package worth approximately $2 trillion. The CARES Act expanded certain loan programs administered by the Small Business Administration. It also created a new SBA program to help small-business owners affected by the coronavirus outbreak. The loan programs all have different purposes, so small businesses will have to compare what option works best for them.

The bill established a new $349 billion program to help smalls keep their workforce on the payroll. The Paycheck Protection Program will provide capital to small businesses without collateral requirements, personal guarantees or SBA fees. All loan payments will be deferred for six months but will accrue interest during this period. The SBA will forgive the portion of the loan that is used to cover the first eight weeks of payroll costs, rent, utilities and mortgage interest. Businesses must keep their workforce largely intact during that period to qualify for loan forgiveness. No more than 25% of the forgiven amount can be used for non-payroll costs. Loans can be up to 2.5 times the borrower’s average monthly payroll costs or up to $10 million. The interest rate will be fixed at 1%. (Here's more information about the program. A sample application form for borrowers can be found here.)

Many small businesses will likely qualify for Payroll Protection loans. Businesses and other employers must have been in operation on February 15, 2020, to qualify. Small businesses, nonprofits, self-employed individuals and veterans organizations with 500 or fewer workers can apply for the loans under the new program. Some businesses with fewer than 1,500 employees in certain industries may qualify too (click here to see more information about the SBA’s size standards). Businesses that have pending or existing SBA disaster assistance loans can still receive funding through the Paycheck Protection Program as long as the loans aren’t used for the same thing. A single business can only apply for one loan under the program. Small-business owners can begin applying for PP loans on April 3. Independent contractors and people who are self-employed can begin applying on April 10.

Some lenders will have to become certified by the SBA before they can participate in the PP program. Because the anticipated response is greater than anything ever experienced by the SBA, the agency will allow lenders that don’t currently participate in any of its loan programs to process and service these loans. Federally insured banks, credit unions, farm banks and a broad range of nonbanks can participate in the Paycheck Protection Program, but they must be certified by the SBA first. The loans will come with a 100% guarantee from the SBA. The agency will speed up the certification process and will issue guidance for lenders interested in participating. Lenders have the authority to approve loans on the spot so folks can get their money on the same day. The only requirement is that the loan is first registered with the SBA to make sure the borrower hasn’t already gotten a loan through another bank. Lenders will be compensated by processing fees paid by Uncle Sam. New lenders can submit their application via email to the SBA. The agency has yet to provide any application forms or criteria that these companies will have to meet.

For businesses that need a quick infusion of capital to cover expenses right now, a disaster loan and an emergency grant could help your business. The CARES Act broadened the existing Economic Injury Disaster Loans program maintained by the SBA. The CARES Act significantly expanded the disaster loan eligibility and may provide emergency cash advances that can qualify for forgiveness if used for paid leave, payroll maintenance, meeting higher supply chain costs and other qualified expenses. Those applying for a disaster loan can also receive a cash grant of up to $10,000 within three days of applying for the loan. There are restrictions on businesses that receive the loans. Small businesses must apply for the loans directly with the SBA.

For those needing help to keep up with payments on your current or future SBA loan, the SBA’s Small Business Debt Relief program could help. The program provides immediate relief to small businesses with non-disaster SBA loans, such as the SBA’s 7(a) and 504 loans, and microloans. Under the program, the SBA will cover all payments on these loans, including principal, interest and fees, for six months. You can apply for one of these loans through any lender already participating in these SBA loan programs.