The Paycheck Protection Program (PPP) Flexibility Act was signed into law last week. This Act makes some important changes to the Loan Forgiveness deadlines and calculations. We have outlined the changes below.
- Extended the covered period for loan forgiveness from 8 weeks to 24 weeks after the date you receive your loan. If you have already received a PPP loan, you have the option to still use the 8 weeks.
- Lowered the requirement that 75% of the loan must be used for payroll to 60% for payroll.
- Provided safe harbor protections if you are unable to rehire individuals who were employees on February 15, 2020 or you are unable to hire qualified employees by December 31, 2020.
- Extended the deferral period for payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender.
- In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved
I am sure you will have questions, please don't hesitate to give us a call.
You are required to keep all documentation for the PPP loan application and the forgiveness application for 6 years. If you would like to keep a second copy in Canopy, we can create a folder for you to upload your documents. This could protect you from lost or damaged documents.
Remember that you cannot use Federal FICA, Medicare and Unemployment payments as you calculated your loan forgiveness. You can use State unemployment.