PPP Updated! Loan Forgiveness Changes & More!
The U.S. Senate recently approved the House-passed version of the Paycheck Protection Program (PPP) legislation Wednesday night. It is called the Paycheck Protection Flexibility Act which is expected to be signed by the president. What does that mean for you and your business?
Here is a brief overview of the latest changes in the bill:
Loan recipients now have 24 weeks to spend the funds, or they may elect to keep the original eight week period.
The percentage of the loan money required to be devoted to payroll expenditures have been reduced from 75% to 60%.
This item does come with a new catch -if a borrower fails to spend at least 60% of the loan money on payroll, then none of the loan will be forgiven.
The minimum repayment term period for PPP loans is extended from 2 years to 5 years.
The deadline for rehiring employees and restoring wages to pre-pandemic levels is extended from June 30, 2020, to December 31, 2020.
The bill allows businesses that took a PPP loan to also delay payment of employer's share of FICA payroll taxes, which was originally disallowed under the CARES act.
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