Jun 5, 2020
Posted Under: COVID
The Paycheck Protection Program Flexibility Act, signed into law today, gives organizations more flexibility and time to spend PPP funds.
Highlights from the Act include:
- An extension of the “covered period” for PPP loans from 8 weeks to 24 weeks. Note that the covered period cannot extend beyond Dec. 31, 2020.
- A reduction in the percentage of funds that must be spent on payroll. Specifically, the requirement to spend 75% of PPP funds on payroll reduced to 60%. To qualify for any forgiveness, borrowers must spend at least 60% on payroll costs.
- Extended loan terms for any unforgiven portions that need to be repaid from 2 years to 5 years, at 1% interest.
- An extension to December 31 for employers to restore employee and wage levels to pre-pandemic levels.
- A removal of limits on loan forgiveness for small businesses and nonprofits that were unable to rehire employees, hire new employees or return to the same level of business activity as before the virus.
- An opportunity for payroll tax deferment for PPP recipients.
Although the law has been signed, the SBA and treasury have yet to release updated guidance. We will continue to advocate for nonprofits and keep you updated about the latest developments. Contact us if you have any questions.