Paycheck Protection Program Update
By now, you’re likely familiar with the Paycheck Protection Program (PPP), which provides forgivable loans to small businesses impacted by the COVID-19 pandemic (for background information, see our blogs about PPP here, here, and here). As many business come to the end of their 8-week covered loan period, the SBA released a loan forgiveness application and instructions.
In other PPP news, there are several proposed amendments to the program that could benefit borrowers.
Senator Joe Manchin (D-WV) proposed a bill that would extend the time frame in which borrowers of less than $500K can utilize their PPP funds, from 8 to 16 weeks after the date they receive the funds.
Senators Todd Young (R-Ind.) and Michael Bennet (D-Colo.) made a similar proposal to extend the 8-week covered period to use PPP funds to 16 weeks after the loan is disbursed for the hardest-hit businesses that have seen revenues decline by at least 25%.
Representatives Dean Phillips (D-MN) and Chip Roy (R-TX) introduced the Paycheck Protection Flexibility Act which would: (1) Allow forgiveness for expenses beyond the 8-week covered period; (2) Eliminate restrictions limiting non-payroll expenses to 25% of loan proceeds; (3) Eliminate restrictions that limit loan terms to 2 years; (4) Ensure full access to payroll tax deferment for businesses that take PPP loans; and (5) Extend the rehiring deadline to offset the effect of enhanced Unemployment Insurance.
These pieces of legislation are all in proposal stage, so a lot can change between now and implementation, should one pass House and Senate and be signed into law. Stay tuned.
Please note this current global emergency and applicable laws, regulations, proposals, guidance, advice, and responses change rapidly. We strive to keep you up to date as much as possible, but this blog article is intended for general informational purposes only and should not be construed as legal advice or opinion. Contact myHRcounsel with questions concerning specific facts and circumstances.
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