Congress Passes Favorable Modifications to Paycheck Protection Program
Last week, Congress passed and the President signed the Paycheck Protection Program Flexibility Act, legislation to allow employers additional latitude in utilizing their Paycheck Protection Program (PPP) loan. NRMCA Government Affairs reported last week that this legislation passed the House of Representatives, but appeared to be on hold in the Senate as the Senate Small Business Committee readied its version of the legislation. However, with the 8-week window approaching for many PPP loans, Senate Majority Leader Mitch McConnell moved the legislation and the President signed it on Friday, June 5.
The legislation, now law, makes the following changes to PPP loans:
- The window within which to spend PPP funds is extended from eight weeks to 24 weeks or December 31, 2020, whichever is earlier;
- The payroll to business expense split, set at 75/25%, is relaxed to 60/40%; a business can now spend 40% of the loan on qualified business expenses; and
- For loans not eligible for forgiveness, repayment window is extended from two years to five years.
Treasury has not yet issued guidance based on this legislation, but when it does we will post it on NRMCA’s COVID-19 resources page. As always, we urge all NRMCA members to consult their attorney, lender and tax professionals when utilizing these programs.
For more information, contact Andrew Tyrrell at email@example.com.