On June 5th, President Trump signed into law the PPP Flexibility Act (PPPFA) of 2020.
Here are the highlights of the Act:
- Extension to 24 weeks to spend loan proceeds instead of the original 8 weeks
- Reduction of the required payroll spending from 75% to 60%. You may now use up to 40% for rent and utilities
- Lengthen the time to repay the “non-forgivable” portion of the PPP proceeds to 60 months at a 1% APR vs. the original 24 months
- Extend deferral of Social Security taxes until the end of 2020 even if PPP loan is forgiven
- Extend the period of time to reverse decreases in employment during February 15 & April 16, 2020 from June 30 to December 31, 2020
- Employers that received PPP loans prior to June 5, 2020 may elect to retain the original 8-week covered period to spend the loan proceeds
There is still money available for PPP loans, but you must apply by June 30th. If you have any questions about the PPPFA or the loan forgiveness process, your SBA banker or payroll provider is a good place to start. As always, Killingsworth Spencer in Roswell is also a great source for answers to PPP and all tax matters. We will keep you posted if there are future regulation changes.