On June 8, 2020, the Small Business Administration (SBA) Administrator Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin released a statement regarding the enactment of the Paycheck Protection Flexibility (PPP) Act
In light of the new PPP Act, there are a few highlights we want to point out, whether you currently have a PPP loan, or are thinking of applying for one. This new legislation on the PPP came about because the original terms proved to be too narrow and difficult to implement for many businesses.
Changes You Should Note
- You now have 24 weeks to spend your funds, up from eight weeks.
- You need to spend 60% of the loan on payroll, down from 75%.
- The covered period of the loan now ends December 31, 2020 instead of June 30, 2020.
- You won’t have to make employer payroll tax payments through the end of 2020.
- Your business will not lose any loan forgiveness eligibility if you can show that some employees declined to return to their jobs or the pre-pandemic headcount is no longer required.
- The payback period for new loan applicants has been extended from two years to a minimum of five for those not seeking or who are ineligible for forgiveness.
- June 30, 2020 remains the last date on which a PPP loan application can be approved.
The new guidelines and application have not yet been released. SBA, in consultation with Treasury, will issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing these legislative amendments to the PPP.
For more information, please click here to view the joint statement by the Treasury and Small Business Administration.
We understand you may have many questions and concerns about the PPP Forgiveness and Flexibility programs and our COVID-19 Response Team is here to help you navigate this. We have many resources and free counseling available to you. Click Here to access our COVID-19 Resources page.
About the Paycheck Protection Program
The Paycheck Protection Program was established by the CARES Act and is implemented by the Small Business Administration with support from the Department of the Treasury. This program provides small businesses with funds to cover payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. The PPP loan helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.
To date, the program has provided over 4.5 million small business loans totaling more than $500 billion to ensure that approximately 50 million hardworking Americans stay connected to their jobs.
Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. Visit the U.S. Department of the Treasury’s website for more details about PPP.