On Friday, June 5th the Paycheck Protection Program Flexibility Act was signed into law, amending certain Paycheck Protection Program (PPP) loan forgiveness rules, for both existing and future borrowers.
The most impactful changes in the new Act include the following:
- The spending period for approved PPP loan funding has been extended from 8 weeks to 24 weeks. This allows another 4 months of spending toward loan forgiveness.
- The minimum amount of funds that must be devoted to maintaining payroll has been reduced from 75% to 60%. This allows an increased percentage of specific non-payroll related items, including mortgage interest, rent and utilities.
The Small Business Administration (SBA) has not yet issued their rules and guidance about how the new Act will be implemented, but promises to do so promptly. Further detail about the changes themselves can be found in the June 8th press release issued by SBA.
Per our previous communication to all of our PPP loan customers, we will continue to monitor this situation and will send additional email(s) when we have information that is actionable for your loan forgiveness.
In the meantime, we continue to recommend that you track your weekly spending of PPP funds by major category, such as:
- Payroll related
- Number of employees
- Wages and salaries
- Health insurance costs
- Retirement benefits costs
- Mortgage interest
We remain committed to communicating with you on a timely basis and encourage you to contact us with any questions you may have.