Please visit our COVID-19 resources page with more information for business owners and employees.
Updates from the U.S. Department of Treasury and SBA.
On June 10, 2020, the U.S. Department of Treasury and Small Business Administration (SBA) released additional guidance to provide clarity on the recently passed Paycheck Protection Program Flexibility Act (PPPFA). Here are a few highlights:
The new guidance clarifies PPP loan forgiveness requirements. With the passage of the PPPFA, businesses now only have to use 60% of the loan on payroll costs instead of the originally stated 75%. In the original text, it appeared that if businesses didn’t use a full 60% of the loan of payroll, none of the loan would be forgiven. However, new guidance clarifies that even if you don’t spend 60% or more on payroll costs, you are still eligible for partial loan forgiveness.
As of June 5, 2020, the new loan forgiveness period is 24 weeks instead of eight weeks. If your loan was made before then, you have the option to elect an eight-week or 24-week forgiveness period.
Under the PPPFA, loan repayment periods have been extended to five years for loans made after June 5, 2020. If you received a PPP loan before that date, your repayment period is still two years, but lenders have the option to extend those to five years.
If the borrower submits the loan forgiveness application within 10 months of the end of the forgiveness period, they won’t have to make any principal or interest payments until the SBA pays the lender the loan forgiveness amount. If the forgiveness application is not submitted within 10 months of the forgiveness period, the borrower will begin paying principal and interest at the end of that 10 months.
Read the release from the SBA for more info about these updates.
There are still PPP funds available! PPP loans can be approved through June 30, 2020, or until funds run out, whichever comes first. As of June 11, 2020, there’s about $130 billion still available for PPP loans. Visit our blog to learn more about the PPP loans and what they can be used for. Reach out to your lender for more info about the program.