PPP Flexibility Act of 2020
On June 3, 2020, Congress passed the PPP Flexibility Act of 2020 (“PPP Flexibility Act”) after receiving bipartisan support in both the House and Senate. The intent of the PPP Flexibility Act is to provide small businesses with more time to spend down PPP funds and make it easier for small businesses to continue the road to recovery from the COVID-19 pandemic. The changes to the PPP are generally favorable to PPP recipients and include the following:
- An election to increase in the forgiveness period from 8 weeks to 24 weeks.
- Added spending flexibility – Instead of a requirement to spend at least 75% of the funds on payroll, the requirement is now for 60% of the funds to be spent on payroll costs.
- Loan forgiveness will be considered even if FTE is not achieved if recipient can, in good faith, show (a) an inability to rehire individuals who were employees on Feb. 15th and (b) an inability to hire similarly qualified employees for unfilled positions on or before Dec. 31, 2020
- For loans not forgiven, the 2 year repayment term was extended to 5 years.
- Payroll tax deferral availability
After the President signs the bill, the Small Business Administration (“SBA”) & U.S. Treasury is expected to issue rulings and additional “FAQ” interpretations to provide more insight into specific situations.
Please visit us online or reach out to our team members directly to further discuss any questions.
PPP Program Update
The Paycheck Protection Program (“PPP”) has been fluid from the start, with a seemingly constant wave of rulings, “FAQ” updates, and interpretive guidance.
Since the inception of the program, there have been two separate rounds of funding. According to statistics published at www.treasury.gov, as of May 31, 2020, over 4.4 million loans have been issued at an aggregate funding level of $510 billion. Since the PPP has appropriated $630 billion toward the program, approximately $120 billion of funding remains available to borrowers.
With so much funding available, there remains an opportunity for companies, sole proprietors, and independent contractors to still apply for the PPP program if they haven’t already done so.
Please visit us online or reach out to our team members directly to further discuss the eligibility and forgiveness requirements of the program.