A joint statement by SBA Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin today clarified that PPP recipients will be eligible for partial forgiveness if they do not meet the 60% threshold as recently amended in the June 5 bill. The recent legislation inadvertently included a forgiveness "cliff" making the loan fully non-forgivable if less than 60% of the proceeds was used for payroll. Instead, a sliding scale as was previously allowed will be used to determine the total amount forgivable.

Loans must still be applied for by June 30, 2020 in order to be accepted. This deadline has not changed.

We would like to clarify that the five-year repayment term applies automatically to new loans effective June 5, 2020 but an extension must be arranged with your lender if you received a loan prior to June 5. The law does not automatically extend the terms of all loans retroactively.

Conversely, the CARES Act has been amended to automatically allow 24 weeks for a business to use their loan in order to maximize forgiveness. This significantly extends the eight weeks as previously allowed. Please be aware that there has been no guidance to allow anyone with payroll limitations to have forgiveness beyond an 8/52 ratio (Schedule C filers and those who make over $100,000).