Paycheck Protection Program Reform
President Trump, just this morning, June 5, 2020, signed the Paycheck Protection Flexibility Act of 2020 (“Bill”) into law, which loosens some of the rules small businesses must follow when applying or using Paycheck Protection Program (“PPP”) loans. Some of the changes to the PPP that this new Bill accomplishes include:
- Extending forgiveness period to 24 weeks;
- Replacing the 75/25 rule with a 60/40 rule;
- Extending the maturity rate for new PPP loans to 5-years (existing loans will remain at the two-year maturity);
- Allowing business that receives forgiveness to also receive payroll tax deferment;
- Ensures small business won’t be penalized by high unemployment benefits; and
- Creates a safe harbor for businesses that are required to open at only 50% capacity.
If you have received or intend to apply for a PPP loan it is important to stay up to date with new requirements and/or changes to the PPP that may affect your loan disbursement or loan forgiveness eligibility. For more information on the Paycheck Protection Program updates or any Covid-19 matter and how that applies to your business, please contact the Employer Lawyers at Chauvel & Glatt.
The material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes. We are also not tax advisors or tax attorneys and this article should not be construed to offer tax advice in any form. Please contact your CPA for more information and how it can apply to you and your business. For information on your particular legal circumstances, please contact Chauvel & Glatt at 650-573-9500.