In a unanimous vote, the U.S Senate passed the Paycheck Protection Program Flexibility Act of 2020. The legislation, which moved through the U.S. House of Representatives last week, creates more flexibility for borrowers and extends the time period for businesses to use the funds from eight weeks to 24 weeks, and changes the ratio from 75/25 to 60/40 for payroll to other fixed costs. Other updates include:
- Extending the repayment period to a minimum maturity of five years after application for forgiveness with a remaining balance.
- Access to payroll tax deferment for businesses that received PPP loans.
- Extending the rehiring deadline to align with expiration of enhanced unemployment insurance benefits.
The bill now goes to the President’s desk for his signature.
We expect the forgiveness PPP loan application to change based on the new legislation. If your business has been awarded a PPP loan, you will need to work with the lender which provided you the loan. Many of these financial institutions will require that you use their forms to apply for forgiveness (not the standard SBA form), and they may require that you provide your PPP forgiveness application and documentation on-line.
Additional information can be found here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program