SD+D COVID-19 Response Team: Breaking News: The Paycheck Protection Program Flexibility Act Passes Congress June 4, 2020
June 4, 2020 | Sebaly Shillito + Dyer
Congress recently passed the Paycheck Protection Program Flexibility Act, which makes significant changes to the Paycheck Protection Program (PPP), including:
- Reducing the portion of PPP funds that must be spent on payroll costs from 75% to 60%.
- Extending the “covered period” for spending PPP funds from 8 weeks to the earlier of 24 weeks from loan disbursement or December 31, Although borrowers who received a PPP loan prior to the enactment of the Paycheck Protection Program Flexibility Act can choose to continue using the 8-week period.
- Extending the deadline to apply for PPP loans to December 31, 2020
- Extending the deferral period of PPP loans from 6 months to 1 year.
- Extending the deadline to rehire employees and restore wages to pre-COVID levels to December 31, 2020, in order to have full forgiveness of PPP loans.
- Providing an exception to loan forgiveness reduction if the number of full-time equivalent employees is This exception applies to borrowers only if they, in good faith, document an inability to rehire individuals who were employees on February 15, 2020, and an inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020. Borrowers may also qualify for this exception by documenting an inability to return to the same level of business activity as they were operating at before February 15, 2020, due to compliance with health and safety requirements.
- Extending the maturity of PPP loans that are not forgiven to 5 years
President Trump is expected to sign the Paycheck Protection Program Flexibility Act this week. We will provide a more detailed summary in a subsequent update, as more information and guidance from the SBA is available.
If you have any questions or concerns about your PPP funds, please call us at 937-222-2500 and ask for a member of SS+D’s COVID-19 Response Team.
ABOUT THE SS+D COVID-19 RESPONSE TEAM
The SS+D COVID-19 Response Team was formed to provide clients, colleagues, and friends of the Firm updates for the foreseeable future on COVID-19 issues facing businesses, executives, and employees. Please let us know if there are any items/issues you would like for us to track or summarize.