PPP Loans Still Available & Terms Eased, New Deadline June 30, 2020
The U.S. Senate unanimously passed House Bill H.R. 7010 to ease restrictions and extend terms for PPP borrowers. The bill is headed to President Trump, who is expected to sign it into law.
Longer Period to Spend: The bill extends the 8 week spending period to 24 weeks. All new PPP borrowers will have a 24 week covered period, but the covered period can’t extend beyond December 31, 2020. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness and allow more time to rehire employees as needed.
Greater Flexibility in Spending: The payroll expenditure requirement drops from 75% to 60%. For forgiveness, borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Previously, borrowers were required to lower the amount eligible for forgiveness if less than 75% of the funds were not used for payroll costs.
Extension of the Loan Terms: For loans not qualifying for forgiveness, existing PPP loan terms can be extended from 2 years to 5 years, with an interest rate at 1%. Current borrowers must contact their lenders to negotiate new terms.
Payroll Tax Deferral: The bill allows businesses that took a PPP loan to delay payment of their payroll taxes, which was prohibited under the CARES Act.
PPP loans are still available and the deadline for applications is June 30.
Let us know if you would like assistance in applying for loans. We have helped over 100 businesses apply for these loans and are continuing to follow up and stay up to date.
