Improvements coming to Paycheck Protection Program
The federal government has passed a number of important changes to the Paycheck Protection Program to help improve the process and make it easier for employers to access loan forgiveness.
While the full legislation can be read here, below are some highlights from this bill.
- The bill lowers the amount of loan proceeds that must be used for payroll expenses in order for the loan to be eligible to be completely forgiven. It is decreased from 75 percent to 60 percent.
- The “covered period” – the time when a business has to spend the loan proceeds – is extended from eight weeks to 24 weeks.
- It protects employers from reductions in loan forgiveness if a business had to reduce the number of FTEs between Feb. 15 and Dec. 31, 2020.
- The loan maturity length is extended to five years for loans approved on or after June 5. This is only relevant for loans that are not completely or partially forgiven.
In addition, it’s important to note that it is not too late to apply for a PPP loan. Funding remains in the program and businesses have until June 30 to apply. Click here to learn more.