If it wasn’t stressful enough to make sure you followed all the guidelines to get your PPP loan forgiven, get ready for a little relief! For ONCE, the SBA and the Treasury are making changes that may work in your favor! This is what you’re looking at now.
– Extension of the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement. Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
– Lower the requirements of 75% to 60% for which a borrower’s loan proceeds must be used for payroll costs during the NEW 24-week loan forgiveness covered period. If a borrower uses less than 60% of the loan amount for payroll costs during this period, the borrower will continue to be eligible for partial loan forgiveness.
– Allow more flexibility for loan forgiveness if a borrower was not able to return to the same level of business as before February 15, 2020 due to compliance requirements related to Covid-19 issued between March 1 and December 31, 2020.
– Provide a safe harbor for loan forgiveness to borrowers based on reductions in full-time equivalent employees due to inability to rehire individuals who were employed on February 15, 2020. This includes not being able to hire similarly qualified employees for unfilled positions by December 31, 2020.
– Increase to five years the maturity of PPP loans that are approved by SBA on or after June 5, 2020
– Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date the SBA remits the borrower’s loan forgiveness amount to the lender.
– In addition, the new rules will do confirm, June 30, 2020, remains the last date on which a PPP loan application can be approved.
All GREAT changes, right?!?! The SBA and Treasury definitely identified the inability to dictate to small businesses who they hire. These changes make complete sense considering so many variables go into hiring, firing, and at this point maintaining a business’s market size. Many of the compliance requirements businesses had to adhere to during the shutdowns created havoc to all and it is definitely a breath of fresh air to see the powers that be recognize this fact.