WHAT'S CHANGING WITH THE PPP
June 5, 2020
The Paycheck Protection Program is getting a bit of a facelift as the U.S. Senate approved changes to the original bill on Wednesday, June 3rd. The new changes allow more flexibility for restaurant, retail and other business owners, who haven't had the ability to jump start their businesses with the new social distancing regulations from COVID-19.
The purpose of the PPP is to help small businesses through COVID-19, keep Americans employed and for our economy to have a quicker snap-back after the crisis. Due to the expediency of getting the program started and the uncertain times we were facing, there were bound to be some loose ends and now the House and Senate are working to tie them up.
WHAT'S CHANGING?
- "Covered period" under which small businesses can spend the loan proceeds extended to 24 weeks, or until December 13th
- Originally, to ensure a maximum level of forgiveness, 75% of loans had to be payroll expenses. This has been lowered to 60%, giving businesses the ability to use the additional amount on rent, mortgages interest and utilities
- If social distancing guidelines from the CDC impacted a business's ability to return to the same operating capacity, they now have more time to go through the rehire process or obtain forgiveness
- The limits have been removed for businesses that were not able to rehire employees, hire new employees or return to the same level of business activity from before
- It is no longer considered "double dipping" to take a PPP loan and qualify for a separate tax credit to defer payroll taxes
- Businesses have five years to repay any unforgiven amounts of the loan at 1% interest rates
- Businesses now have 10 months to apply for loan forgiveness before they must start making interest and principal payments. PPP loan interest and payments will be deferred until the loan is forgiven by the lender
We hope you are doing well and staying happy and healthy. If you have questions regarding the updates to the PPP and how it might affect you, please do not hesitate to reach out. You can drop us a line at 614-431-4343 or send us an email at
GerberTeam@GerberClarity.com.
Stay healthy!
