- On June 19, 2020
6/8/20 UPDATE: President Trump signed the Paycheck Protection Program Flexibility Act (PPPFA) into law last Friday, which will increase access to PPP loans and extend forgiveness requirements to ease the burden on loan recipients.
The following is a summary of the legislation’s main points:
• Extension of the 8-week period to 24 weeks to make it easier to reach full forgiveness. Borrowers can retain the original 8-week period if desired
• Reduction of the payroll expenditure requirement from 75% to 60%
• Increase of loan maturity period from two years to five years at a 1% interest rate
• Extension of loan application deadline from June 30 to December 31, 2020
• Deferment of payroll tax payments until the SBA compensates lenders for any forgiven amounts. The program currently has a six-month deferral period
• Extension of the deadline to restore workforce levels and wages to pre-pandemic levels from June 30 to December 31, 2020
• Introduction of two new exceptions regarding full-time equivalent (FTE) reduction. Requirements to be documented:
• Inability to rehire or find qualified employees for unfilled positions on or before December 31, 2020
• Inability to restore business operations to February 15, 2020 levels due to pandemic-related operating restrictions
Additional guidance is expected to follow from the SBA to provide clarity on possible audits of loans and existing questions from the previous legislation. Kelleher & Buckley, LLC can help decipher and assess any critical legal issues surrounding PPP loan applications, certifications and forgiveness.