Congress Passes Act Modifying PPP Loan Forgiveness Terms

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The United States House and the United States Senate have passed the Paycheck Protection Program Flexibility Act.  The Act eases rules around how small businesses may use the Payroll Protection Program (“PPP”) Loan funds.  The legislation is awaiting President Trump’s signature.
 
Under the Act:

  • The deadline for spending PPP funds would be extended from eight weeks to 24 weeks,

  • Payroll costs need only constitute 60% of the PPP funds rather than the original 75% threshold to be eligible for forgiveness,

  • The original June 30, 2020 deadline to rehire workers who were laid off is postponed to December 31, 2020.

  • Borrowers may achieve full forgiveness if they cannot restore their previous workforce because they were unable to restore business operations to pre-Covid-19 levels, and

  • The PPP loan term is extended from 2 years to 5 years.

To date, the Small Business Administration, has approved 4.5 million PPP loans worth $510.6 billion. More than $120 billion in funding is still available if you have not applied for a PPP loan.

Remember, the Senate’s passage of the bill does not make this law. But, the President has indicated support for the Act and is expected to sign.

As you face the day to day questions of balancing business concerns, the law, and health and safety, the firm is here to assist in any way we can.