June 9th: PPP Forgiveness Update
For more information and updates on COVID–19, visit skytalegroup.com/covid-19
Clients and Friends,
Last night the Senate unanimously passed the PPP Flexibility Act making the terms of forgiveness more favorable to business owners – we are anticipating the President to quickly sign it into law. Though we expect additional guidelines and an overhaul of the existing PPP Forgiveness Application, here’s everything you need to know right now:
- The term ‘covered period’ is amended to begin on the date of the origination of the loan and ending the earlier of:
– 24 weeks after such date of origination; or
-December 31, 2020
- Maximum maturity of 2 years has been extended to a minimum maturity of 5 years, for new loans issued.
- Limitations on forgiveness are amended to allow the borrower to use at least 60% of the proceeds for payroll costs and up to 40% for other allowable costs, as previously defined.
- The deferral period for payment of the loan is extended from 6 months to until the date on which the amount of forgiveness determined under section 1106 of the CARES Act is remitted to the lender.
- The safe harbor for restoring FTE headcount has been pushed back to December 31, 2020.
- The following situations won’t impact the FTE headcount safe harbor if the borrower:
-Had an inability to rehire individuals who were employees of the borrower on February 15, 2020 and an inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020; or
-Is able to document an inability to return to the same level of business activity and operations as before February 15, 2020 due to compliance requirements or guidance issued by the HHS, CDC, or OSHA from March 1, 2020 through December 31, 2020, relating to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19.
As we get more updates, be sure to look for our email our check our resources tab on our website by clicking the green icon below!
– Your Skytale Group Team