New Law, Enacted June 5, 2020, Creates Easier PPP Loan Forgiveness
On Thursday, May 28, 2020, the U.S. House of Representatives approved the Paycheck Protection Program Flexibility Act of 2020 by a vote of 417-1. On Wednesday, June 3, 2020, the Senate passed the bill by a unanimous voice vote. The president signed the bill into law on Friday, June 5, 2020.
Here are some highlights from this new law:
- For a business that currently has a PPP loan—allows the business to extend the eight weeks to 24 weeks or elect to retain the original eight weeks
- For those under the 24-week rule—requires that 60 percent of the loan proceeds be spent on payroll
- For new loans, changes the payback period for the (unforgiven) loan from two years to five years, and retains the 1 percent interest rate; for existing loans, authorizes the bank and borrower to agree to a five-year payback
- For those businesses under the 24-week rule—changes the workforce-in-place requirement from June 30 to December 31
- For businesses under the 24-week rule—creates a new, easier path to full loan forgiveness should the business be unable to sustain a full workforce
PPP application deadline extended
The President has signed Senate bill S. 4116, extending the deadline to apply for Paycheck Protection Program (PPP) loans to August 8, 2020. This provides additional time for small businesses who have yet to receive a PPP loan to apply for the close to $130 billion in loans still available.
The text of the bill is available at: www.congress.gov/bill/116th-congress/senate-bill/4116/text