As another year comes to a close, we recommend finding time to reflect on 2021…
COVID-19 Update May 28, 2020
The House of Representatives passed their new legislation concerning the PPP loan program. The name of this bill is Paycheck Protection Program Flexibility Act of 2020. Here is an overview of the changes to the PPP program that is in the Bill:
- Extending the PPP loan forgiveness period to include costs incurred over 24 weeks after a loan is issued or through Dec. 31, 2020, whichever comes first.
- Extending the period where a loan could be forgiven from December 31, 2020, from the current June 30, 2020, if businesses restore staffing or salary levels that were previously reduced. The provision would apply to worker and wage reductions made from February 15 through the end of April.
- Allowing companies that document their inability to rehire workers employed as of February 15, 2020, as well as their inability to find similarly qualified workers by the end of the year to remain qualified for loan forgiveness.
- Extending the deadline to apply for a PPP loan from June 30. 2020 to December 31, 2020.
Changing the current 75%/25% requirement of payroll to mortgage/rent/utility expenses to 60%/40%.
- Repealing a provision from the CARES Act that barred companies with forgiven PPP loans from deferring their payroll tax payments.
- Allowing borrowers to defer principal and interest payments on PPP loans until the SBA compensates lenders for any forgiven amounts, instead of the current six-month deferral period. Borrowers that don’t apply for forgiveness would be given at least 10 months after the program expires to start making payments.
- Establishing a minimum loan maturity period of five years following an application for loan forgiveness, instead of the current two-year deadline set by the SBA. That provision would apply to PPP loans issued after the measure is enacted, though borrowers and lenders could agree to extend current loans.
Remember this is only on one side of Congress. It still needs to get through the Senate. We shall see.
Below are a couple of articles we thought were worth reading on the current state of the PPP forgiveness program. These are good reference tools to use for practice, so you can be prepared if the new changes the PPP loan program fails to pass the Senate.
- 10 Takeaways on the PPP Loan Forgiveness – good info to help you prepare your documentation for the PPP loan forgiveness application.
- Audit Proof your PPP loan monies – another good article to help ensure you maximize your forgiveness of the PPP loan.
- DOL Final Rule for 401k Participant Disclosures – If you have a 401k, there are new rules that allow employers to deliver disclosure documents to plan participants primarily electronically.
- HR7010: Paycheck Protection Program Flexibility Act of 2020 – This is a copy of the proposed amendments to the PPP bill referenced above.
I hope you are having a good month! June is almost here, and with that comes hurricane season. If you need help with your Emergency Hurricane Preparedness Plan, please reach out.