PPP Changes Ease Loan Forgiveness
(Updated June 24, 2020)
UPDATE: The deadline to apply for a PPP loan is June 30, 2020.
- As of June 20th, approximately $100 Billion remains in the program and available for loans.
- The modified forgiveness terms makes it much easier to ensure your loan is forgiven.
In an effort to address limitations of the Payroll Protection Program (PPP) loans, the Senate passed, and the President sigened, a House version of the legislation to update the program.
As a PPP borrower:
- You can optionally extend the eight-week period to 24 weeks, making it easier to reach full forgiveness.
- Your payroll expenditure requirement changes to 60% from 75%, but is now “all or nothing” instead of scaled based on percentages.
- You can use the 24-week period to restore staffing and wages to the levels needed for full forgiveness. The deadline is also extended to December 31, 2020 from June 30, 2020.
- You may be able to invoke one of three exceptions if unable to fully restore the workforce.
- You can exclude employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic.
- You can adjust calculations if you cannot find qualified employees
- You can adjust calculations if you are unable to restore business operations to Feb 15, 2020 levels due to on-going COVID-19 operating restrictions.
- You now have five years to repay the loan instead of two years
- Your interest rate remains at 1.00%
- You are now eligible to defer payroll taxes under the CARES Act, even though you are a PPP borrower.