Extension of the Paycheck Protection Program (PPP)
Congress passed a large extension to the
Paycheck Protection Program (PPP), giving small businesses across the nation an extended period of time to apply for the PPP Loan and expanding the loan's forgiveness.
An estimated $120 billion is left in the PPP fund
.
If your small business received a PPP Loan, here's what the extension means for you:
· Extends the PPP loan forgiveness period to include costs incurred over 24 weeks after a loan is issued or through Dec. 31, whichever comes first. Businesses that received a loan before the measure is enacted could keep the current eight-week period.
· Extends a period in which loans can be forgiven if businesses restore staffing or salary levels that were previously reduced to Dec. 31.
· Maintains forgiveness amounts for companies that document their inability to rehire workers employed as of Feb. 15, and their inability to find similarly qualified workers by the end of the year. Under the modified measure, companies would be covered separately if they show that they couldn’t resume business levels from before Feb. 15 because they were following federal requirements for sanitization or social distancing.
· Extends the deadline to apply for a PPP loan to Dec. 31.
· Requires at least 60% of forgiven loan amounts to come from payroll expenses.
· Repeals a provision from the CARES Act that barred companies with forgiven PPP loans from deferring their payroll tax payments.
· Allows borrowers to defer principal and interest payments on PPP loans until the SBA compensates lenders for any forgiven amounts, instead of the current six-month deferral period. Borrowers that don’t apply for forgiveness would be given at least 10 months after the program expires to start making payments.
Establishes a minimum loan maturity period of five years following an application for loan forgiveness, instead of the current two-year deadline set by the SBA. This provision applies to PPP loans issued after this measure was enacted on 6/05/2020, though borrowers and lenders could agree to extend current loans.
