The President is expected to sign the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010) after it passed the Senate Wednesday, June 3rd, without amendment.
raises the forgivable covered loan amount for mortgage, rent, and utility payments to 40% from 25%; extends the time period to re-hire or replace to December 31st (from June 30th)—a borrower may still use the 8 week period; allows a borrower 24 weeks (formerly 8 weeks) to spend the loan proceeds; and provides for a 5 year payment period after the borrower received the PPP loan (w/ an interest rate of 1% if SBA rules followed).
An employer can also defer paying 6.2% payroll tax that employers are charged for employees for 2 years—no such deferral was previously provided. A borrower can defer the payment of the employer’s share until 2021 when 50% of such taxes must be paid w/ the remaining 50% due in 2022.
More guidance and application information is expected from the Department of Treasury and the SBA. As this information is available, TADA will forward.
TADA encourages you to reach out to your CPA and lender regarding these new amendments to the PPP.