Paycheck Protection Program Flexibility Act of 2020
We have received new information that we wanted to get to all our valued clients that have or may be applying for the PPP loans through the SBA.
Several Key Issues are addressed in a H.R. 7010, which may change some of the planning for the Payment Protection Program (PPP) loans. This bill has been passed by the House and Senate and have been signed by President Trump. The following items are key points of the Act.
1. Increase time frame from 8 weeks to 24 weeks for spending PPP loan funds
2. Moves the deadline from June 30th to December 31st, 2020 for the program which also increases the timeframe a business needs to restore their Full Time Equivalents to obtain loan forgiveness for payroll costs. If an employer is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020 or can demonstrate an inability to hire similarly qualified employees on or before December 31, 2020 then full time equivalents will not affect the forgiveness amount
3. Eliminate restrictions limiting non-payroll expenses to 25% of loan proceeds. The PPP loans require that 75% of the loan go to payroll. Expanded ability to use PPP loan proceeds to pay fixed costs in addition to payroll
4. Eliminate restrictions that limit loan terms from 2 years to 5 years
5. Ensure full access to payroll tax deferment for businesses that take PPP loans. The purpose of PPP and the payroll tax deferment was to provide businesses with capital to weather the crisis. Delay of payment of employer payroll taxes and receiving the PPP loan should not be considered double-dipping
We will continue to update as information becomes available.