APPROVED- NEW PPP FLEXIBILITY ACT

Many small business owners are relieved now that the Senate unanimously passed the Paycheck Protection Flexibility. The new bill will significantly increase the flexibility for PPP loan forgiveness and assist many small businesses with surviving through the Covid-19 crisis.

Paycheck Protection Flexibility of 2020:

• Extend the period for business owners to use the funding from 8 weeks to 24 weeks or December 31, 2020.

• Reduce the amount of funding allocated for payroll costs from 75% to 60%. This increasing the funding from 25% to up to 40% for non-payroll expenses.

• Expands the time businesses have to rehire their employees from the June 30th deadline.

• Broaden the timeline recipients have to repay their loan from 2 years to 5 years at 1% interest rate.

• Let companies who receive loan forgiveness defer payroll taxes.

• Expands the period for recipients who do not apply for forgiveness to 10 months from the expiration date to start making payments.

• Loan forgiveness still possible if FTEs won’t come back, or if revenue in December is below February 2020 levels

The new legislation is set to move forward for the president to sign into law. The Senate does reserve the right to make modifications to the law at a later date. In the coming weeks we hope additional guidance will be released.

Please visit the Forbes article for additional information regarding the PPP loan changes.

If you have questions about the PPP loan, please call (781) 209-1188 or email payroll@on-timepayroll.com. We are available to help you navigate your business needs.