Senate Passes PPP Forgiveness Changes
As expected, the Senate passed the PPP forgiveness changes that already passed the House last week. Now it just needs President Trump’s signature, and it’s a done deal.
This will make the following changes in effect as soon as Trump signs it:
- Extend the forgiveness period for PPP loans from eight to 24 weeks.
- Reduce payroll spending requirements from 75% of loan funds to 60% of loan funds, giving businesses more flexibility in deciding how to allocate the emergency funds, and extend a June 30 deadline to hire workers back.
- Extend from two to 5 years the time new PPP loans must be paid back (for any portion of loan that is NOT forgiven)
- Extend the deferral of time to BEGIN repayments (for any portion of loan that is NOT forgiven) to start either the date your forgiveness calculation is finalized, or 10 months, whichever comes first. [this was previously set at 6 months]
- Eliminate the rule that would NOT allow a business to take advantage of the payroll tax deferral options allowed under the CARES Act if they also took advantage of the PPP program and had funds forgiven. With this change, all business can take advantage of that payroll tax deferral regardless of their participation in PPP program.
So, we will be seeing a newly REVISED forgiveness application released by the SBA very soon. The SBA had released the forgiveness application on May 16th, but a new version will be required to reflect the new rules. Keep checking HERE to see if the SBA has released the revised version of the application.
This application has LOTS of detailed information about the safe harbor rule with the size of your staff (headcount) and other calculation details, so PLEASE READ IT CAREFULLY. You can review the version that exists now, so you are familiar with how it works, but just remember that a new one with be coming with the revised numbers from recent legislation change.
You will be getting emails from your bank regarding these changes as well. Just remember, they are all using the exact same forgiveness application that is posted on the SBA’s website, and should all be following the same rules.
Hang in there guys!!