June 4, 2020
On Wednesday June 3, the Senate passed legislation that aims to make changes to the Paycheck Protection Program (PPP) in order to give business owners more flexibility to use the popular loans. It will now head to the President’s desk, who is expected to sign it. Here are some details:
- The legislation gives borrowers the option to extend the duration of PPP loans to 24 weeks from eight weeks, giving small businesses more time to use the money and still have the loans forgiven, while helping them better navigate the uncertainties around reopening.
- It extends the deadline to rehire workers to Dec. 31, a change from the previous June 30 deadline.
- The bill reduces the level of Paycheck Protection Program funds that must be used for payroll to 60% from 75%. However, the borrower must spend at least 60% on payroll costs or none of the loan will be forgiven.
- The legislation includes additional safe harbors allowing borrowers to achieve full PPP loan forgiveness even if they are unable to fully restore their workforce.
- The bill would extend the amount of time small businesses have to pay back loans from two years to five, if they do not qualify to have the loan fully forgiven.
- Businesses can now defer the employer’s share of FICA payroll taxes for two years, with half of the payroll taxes being due in 2021 and the remainder due in 2022.
Brown Edwards will continue to keep you up to date on any important changes to PPP. If you have questions about how these changes affect your business, please call your Brown Edwards professional. Our team of PPP specialists are ready to help.