House Passes a Bill Making Several Favorable Changes to PPP Loan Forgiveness
On Thursday May 28, 2020 the House approved a bill which, if approved in the Senate and signed by the President, would make several favorable changes to the PPP loan forgiveness provisions.
Some of the changes would include:
- Decreasing the minimum amount of loan proceeds required to be used for payroll costs to qualify for loan forgiveness from 75% to 60%.
- Extending the time borrowers have for spending on qualified expenses from 8 weeks to 24 weeks.
- Extending the deadline for employers to rehire workers from June 30, 2020 to December 31, 2020 to avoid having any decrease in full time equivalent employees reduce the forgivable portion of the PPP loan.
- Extending the time to repay the unforgiven portion of their PPP loan from two years to five years for loans originating on or after the day the bill becomes law. Loans originating before this date would still be subject to a two-year term unless the lender agrees to modify the loan term.
- Allowing businesses who have PPP loans forgiven to also defer payroll taxes.
- Extending the time prospective borrowers can apply for a PPP loan from June 30, 2020 to December 31, 2020.