The Paycheck Protection Program (PPP) is a business loan program established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses, self-employed workers, sole proprietors, certain nonprofit organizations, and tribal businesses continue paying their workers. See the links below for further guidance regarding PPP legislation.
The U.S. Small Business Administration (SBA), in consultation with Treasury, released Wednesday, June 17, 2020, a revised loan forgiveness application for the Paycheck Protection Program (PPP). The SBA also unveiled a new EZ application for forgiveness of PPP loans.
The applications reflect changes to the PPP made by the Paycheck Protection Flexibility Act of 2020, P.L. 116-142, which became law June 5. The applications and instructions are available in the links below:
Responding to the needs of small businesses, the Senate passed legislation titled The Paycheck Protection Program Flexibility Act (PPPFA), also known as H.R.7010, on June 3, 2020.
The Paycheck Protection Program Flexibility Act revises the Paycheck Protection Program (PPP) in response to critiques, making it more flexible and offering small business owners increased access to loans.
Since the PPP launched on April 3, over 4.4 million loans have been distributed to small businesses, totaling over $500 billion in value. However, small business owners have overwhelmingly found the PPP too restrictive and clarified an urgent need for more elasticity in the program—specifically, SBOs sought more forgivable non-payroll expenses and a longer window in which to spend the funds. The Paycheck Protection Program Flexibility Act provides this.
So, how exactly has the PPP changed with the implementation of H.R.7010? Here’s a breakdown of what you need to know, and more details are below the table:
Up to 100% of the PPP Loan is forgivable, the SBA released released the PPP Loan Forgiveness Application. The loan will be fully forgiven if the loan proceeds are spent within 8 weeks of the receipt of the loan in most circumstances.
To help you maximize the forgivable amount, use the following PPP Loan Forgiveness Checklist. Remember to check back for updates, as guidance for loan forgiveness is continuously evolving and rules may change.
To learn more about forgiveness of PPP loans the following document will clarify some common PPP Loan Forgiveness Scenarios, that will help you and your company navigate different situations that may be encountered pertaining to PPP loan usage and forgiveness and make better decisions if you understand how these loans will work.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
The Paycheck Protection Program will be available from April 3, 2020 to June 30, 2020.
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