On June 5th, 2020, the Paycheck Protection Program Flexibility Act (PPPFA) was officially signed which will positively impact businesses and self-employed individuals who have received or will be applying for the Paycheck Protection Program (PPP) Loans. Below will be a list of how the PPPFA enhances the PPP Loans:
- Businesses can continue to defer Social Security taxes through the end of 2020
- The percentage of the loan that was required to be used for payroll costs was decreased from 75% to 60%
- The 8-week period to use the funds has been increased to 24 weeks or 12/31/2020 if earlier
- The deadline for employers to return to prior employment / wage levels has been extended from June 30th, 2020 to December 31st, 2020
- The period of loan maturity has been increased from 2 years to 5 years
- Borrowers can now defer payments until the amount of loan forgiveness is determined
Businesses that received their funds before the PPPFA are not forced to abide by the regulations provided by the PPPFA, but they can elect to use them. Also, we want to remind business owners who have not received the loan that these loans still need to be applied for before June 30th, 2020 as that date has not been extended.
Please stay safe and healthy.
The Mitz & Rozansky Team