Paycheck Protection Program Reform Passed By Congress
Last week, the U.S. Congress passed and President Trump signed a Paycheck Protection Program (PPP) reform bill.
The Paycheck Protection Program Flexibility Act gives business owners more time to use emergency funding received under the PPP set up to assist businesses affected by COVID-19. It extends the period in which employers must use the money to qualify for loan forgiveness from eight weeks to 24 weeks.
It also gives small businesses increased flexibility by changing the rule requiring employers to use 75% of the money for payroll, while limiting other costs to no more than 25% to qualify for loan forgiveness. The amended ratio is at least 60% of funds going toward payroll and no more than 40% going toward other costs.
Equally important, the new legislation pushes back a June 30 deadline to rehire workers in order for salaries to count toward loan forgiveness. Businesses now have until December 31, 2020, to rehire workers.
The SBA is expected to provide formal notice of the changes to funded businesses in the near future. More information will soon be posted on the SBA website.This information is provided on an "as is" basis and you acknowledge and agree that CHOICE Administrators, Inc. and its affiliated entities (collectively “Choice”) makes no representations or warranties, express or implied, concerning the accuracy, reliability, timeliness, completeness, or suitability of any content provided. The information provided is not a substitute for professional advice, whether legal, tax, financial, or otherwise and therefore, you should consult an appropriate professional prior to acting on any such information. You acknowledge and agree that in no event will Choice be liable for any general, special, indirect, incidental, or consequential damages, related to the information provided, even if advised of the possibility. All rights to information are expressly reserved by Choice and/or the respective legal owners of such information, including, without limitation, copyright, trademark, and service mark rights. You may not reproduce, publish, or distribute such information without the express written consent of Choice or the respective content owners.