In legislation signed into law on Friday, Congress changed some of the original Payment Protection Program (PPP) loan requirements to make them more flexible. Below are some highlights of the changes.
- It’s now easier to reach full loan forgiveness by reducing the amount of the loan that must be spent on payroll from 75% to 60%. The SBA and Treasury have confirmed that partial forgiveness is still available to those borrowers who do not reach the 60% threshold.
- Borrowers can also choose to extend the window of time to use the money from the original eight weeks allotted to 24 weeks. The funds must still be used this calendar year but gives borrowers more time to reach greater loan forgiveness.
- Congress also allows the full 24 week timeframe to restore workforce levels to pre-pandemic measures. Workers who refuse to return can be excluded from that calculation and you can now adjust workforce levels if the business could not find qualified workers to replace those lost, or if restrictions prevent the business from returning to full Feb. 15 capacity.
- Repayment of the loan can now be over a 5-year timespan if both the lender and borrower agree. New borrowers will automatically get a 5-year timespan to repay.
- Businesses may now delay their payment of their payroll taxes even if they’ve received a PPP loan.
PPP loan funds are still available. To apply or ask additional questions about requirements on your loan , contact your financial lending institution. In addition, MRA is sponsoring a webinar on this topic with two Small Business Administration experts. Check out details here and register!