On December 21st, the U.S. Congress approved a new COVID-19 Relief Bill that includes re-authorization of the Paycheck Protection Program (PPP). The bill contains several amendments to the PPP and forgiveness process for existing PPP loans.
The following is a recap of some of the provisions within the new bill, which still must be signed into law. Specific rules, guidance, new loan applications and instructions have not yet been released. We will make the specific program information available on our website once it becomes publicly available and we have had an opportunity to review and understand it. Please stay tuned to www.mvsb.com
- $284 billion in new funds for the Paycheck Protection Program.
- Existing PPP borrowers may apply for a second loan under certain conditions, provided they have 300 or fewer employees and can demonstrate a 25% reduction in gross receipts during any quarter in 2020 compared with the same quarter in 2019.
- First time PPP borrowers will be subject to the program’s original eligibility rules.
- A simplified forgiveness process for PPP loans of $150,000 or less.
- Repeal of the requirement that PPP borrowers deduct the amount of any Economic Injury Disaster Loan (EIDL) advance from their forgiveness amount.
Changes will be implemented by the Small Business Administration (SBA). Like you, we are waiting for the SBA to release new rules, a new application for the second round of PPP funds and a new forgiveness form for existing PPP loans of $150,000 or less. The SBA is also expected to release additional guidance on how they will handle EIDL advance funds that were previously withheld from already processed forgiveness payments.
We do not know the exact date of when these changes will take place, but can predict they will happen sometime early in January of 2021. We will let you know as soon as we have more information.
Please be assured that we will communicate with you, but feel free to contact us if you have questions about your process or your relationship with Meredith Village Savings Bank by emailing MVSBCommercialCredit@mvsb.com
The Meredith Village Savings Bank Commercial Lending Team