|
It's Official!
Paycheck Protection Program Flexibility Act
("PPPFA")
To All Our Valued Clients and Friends,
On June 5, 2020, President Trump signed the PPFA into law.
Here is a summary of the modifications the PPPFA makes to the CARES Act and PPP:
Maturity Date Extended:
All PPP loans made after the enactment of the PPPFA will have a minimum maturity date of 5 years.
Lenders who made loans prior to the enactment of the PPPFA may, but are not required to modify the maturity date for existing loans from 2 years to 5 years.
Covered Period Extended:
The time frame for the covered period to utilize PPP funds for the allowable expenses has been extended to the earlier of the either 24 weeks following the date of origination or December 31, 2020. It also permits borrowers to choose the 8 week period after the origination date if they choose to instead of the 24 week period.
PPP Application Deadline:
The deadline to apply for the PPP until December 31, 2020.
Full-Time Equivalent Employee Extension & Exceptions:
Extends the date by which borrowers must rehire # of FTE's until December 31, 2020. It also
- Extends the time period for approved expenses to be eligible for forgiveness to the earlier of 24 weeks from date of disbursement or December 31, 2020. It also Expands the full loan forgiveness to provide borrowers the ability to document the inability to rehire the same # of FTE's as were employed on 2/15/20 and borrowers who are unable to return to same level of business due to compliance with COVID-19 related requirements (as per Center of Disease Control, Secretary of Health and Human Services and Occupational Health and Safety Administration) during the period March 1 through December 31, 2020.
Reduces Payroll Expense Requirement:
- Reduces payroll requirement to be a minimum of 60% of the PPP loan proceeds (from the 75% requirement previously)
Deferral Period Extended
- The deferral of the repayment period has been extended to one year from the date of loan origination.
Extension for Application for Forgiveness:
- Borrowers will have 10 months from the last day of the covered period (earlier of 24 weeks from date of origination or December 31, 2020) to apply for loan forgiveness.
- If the borrower does not apply for forgiveness, or a portion is not forgiven, they must begin making payments by the 10th month following the covered period (24 weeks after origination or December 31, 2020)
Delay of Payment of Employer Payroll Taxes
- The PPPFA changes the CARES Act such that borrowers who apply for loan forgiveness are now eligible for deferment of certain payroll taxes under Section 2302(a) of the CARES Act
We will continue to monitor the latest news from the US Treasury and SBA regarding updates to these programs, and will continue to keep you updated as information is available.
We are committed to providing updated information as timely and efficiently as possible. Thank you for your trust and confidence in our team.
|
