The new law extends the time period companies have to spend Payroll Protection Program (PPP) loan funds from eight weeks to 24 weeks. Some additional key points include:
- Borrowers can choose to extend their time frame to 24 weeks, or use the original 8-week period.
- At least 60% of the funds must be spent on payroll or the loan will not qualify for forgiveness.
- The 24-week period can be used to restore workforce and wages to pre-pandemic levels required for forgiveness. That deadline has been extended from June 30 to December 31.
- Borrowers will not receive a reduction in loan forgiveness if they are unable to find qualified employees to bring staffing back to pre-pandemic levels or unable to restore business operations to prior levels because of COVID-19-related restrictions.
- The PPP loan repayment period is now five years instead of two.
- PPP loan recipients may also delay submitting federal payroll taxes to the IRS.
For additional guidance, clarification and support, please contact your lender or a member of our team.