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Paycheck Protection Program Flexibility Act of 2020 Signed into Law

Posted by Admin Posted on June 05 2020

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.