loan forgiveness payment protection program

PPP Restrictions Eased – New PPP loan Legislation Just Passed

GREAT news if you have a PPP loan or are still considering applying for one. 

Congress moved quickly this week, and the president JUST signed it into law. We share the highlights of the new PPP loan legislation below.

Please contact us with any specific questions – the loan forgiveness calculations are still complex, and you will need your books in good order to produce the right documentation. We have the formulated worksheets ready to go to make the calculations to maximize your forgiveness from here on out! We make this much easier, so you can focus on restoring your business as soon as possible!

The updated changes to receive PPP loan forgiveness: 

  • Payroll costs only have to account for 60% of the loan (no longer 75%). BUT the new PPP loan legislation makes this a cliff – meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Originally, there was a sliding scale if the payroll threshold was not met. Congress may still amend this provision and reinstate a sliding scale. 
  •  Borrowers can take the full 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.
  • Two new exceptions for restoring your full workforce have been added. You can still receive full PPP loan forgiveness even if you 1) could not find qualified employees, or 2) were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.

Other New Provisions:

  • New borrowers now have five years to repay the loan instead of two. Existing PPP loans can be extended up to 5 years if the lender and borrower agree. The interest rate remains at 1%.
  • The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.
  • June 30 remains the deadline for applying to receive a PPP loan. 
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