SBA and Treasury Issue New Paycheck Protection Program Guidelines
The SBA and Treasury have issued new guidelines regarding the Paycheck Protection Program, including eligibility for newly released funds and loan forgiveness. Below are some highlights:
June 30, 2020 is the last date on which a PPP loan application can be approved.
The “covered period” for loan forgiveness is extended from 8 weeks to 24 weeks, providing substantially greater flexibility for borrowers to qualify for loan forgiveness.
The requirement in order to qualify for loan forgiveness that at least 75 percent of the loan proceeds must be used for payroll costs during the covered period, is reduced to 60 percent.
Forgiveness for reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with worker or customer safety requirements related to COVID–19.
The maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020 extended for up to 5 years.
The deferral period for payment of principal, interest, and fees on PPP loans is extended to the date that SBA remits the borrower’s loan forgiveness amount to the lender or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period.