June 5, 2020
To keep you updated with the most recent information, I wanted to share the following information regarding the
Paycheck Protection Program
Congress has passed and as recently as today the President has signed, the Paycheck Protection Program Flexibility Act (PPPFA). This reform legislation gives business owners more flexibility and time to use the loan money and still have it forgiven as part of PPP program.
- To address this issue, the Act now extends the PPP program “covered period” until December 31, 2020, and gives employers 24 weeks, rather than eight weeks to spend PPP proceeds. However, a congressional letter was added to the record to clarify that no new PPP loans may be originated after June 30, 2020
- The Act also reduces the percentage of loan proceeds that must be spent on payroll costs from 75 percent to 60 percent, enabling businesses to spend more on overhead and fixed expenses such as rent and utilities.
- The safe harbor restoration deadline has been extended from June 30, 2020, to December 31, 2020.
- Clarifies that loan forgiveness will not be reduced based on an inability to rehire employees if the employer can:
- Document written offers to rehire individuals who were employees of the organization on February 15, 2020; or
- An inability to hire similarly qualified employees for unfilled positions by December 31, 2020.
- Clarifies that forgiveness will not be reduced for failure to maintain employment levels if the organization is able to document the following:
- An inability to return to the same level of business activity as existed prior to February 15, 2020, due to compliance with COVID-19-related guidance for sanitation, social distancing, or
- Worker or customer safety requirements from the Health and Human Services (HHS), the Centers for Disease Control and Prevention (CDC), or the Occupational Safety and Health Administration (OSHA) between March 1 and December 31, 2020.
- The Act also allows employers that receive PPP loan forgiveness to continue deferring payment of the employer share of the Social Security tax under CARES Act (Section 2302) through December 31, 2020.
We know information around the PPP and other assistance programs are constantly changing. If we can assist with any questions you may have or connect you with one of our partners, please let us know…
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