Fee to get PPP loan

Client, sole proprietor, gets $150,000 PPP loan. It is forgiven. He paid $17,000 to the person who got him the loan.

I would think that since the loan was forgiven, he CANNOT deduct this $17,000 fee on his Schedule C.

Even if he cannot take the deduction, I think he should file a Form 1099 for the $17,000.

Any comments or suggestions appreciated.

I'm struggling with a few things:

1) Why it would not be deductible?

2) Why did they pay so much?

3) Why didn't I charge that much?

I think technically speaking, the fees were supposed to be reported to the SBA and something like if they related to helping apply so I just treated it like a normal business expense and moved on...

I would think that since the loan was forgiven, he CANNOT deduct this $17,000 fee on his Schedule C.

Agree fee would be deductible ordinary business expense, especially given that:

Rev. Rul. 2021-2 confirms that no deduction will be disallowed, no tax attribute will be reduced, and no basis increase will be denied by reason of the exclusion from gross income of PPP loan amounts that are forgiven. Accordingly, taxpayers that incurred or paid PPP-eligible expenses may deduct the amounts in the year paid or incurred, depending on their overall method of accounting, and may consider the full amount of such expenses in computing any related tax attributes.

credit TaxAdvisor article.