The SBA has announced modifications to the Paycheck Protection Program intended to make make it easier to qualify for loan forgiveness. Changes include:
- Extending the coverage period for forgiveness from 8 weeks to 24 weeks after disbursement.
- Lowering the requirements to 60% — from 75% — of a borrower’s loan proceeds to be used for payroll during the 24-week loan forgiveness period.
- Providing leniency in loan forgiveness based on reductions in full-time employees for borrowers that are unable to return to the same level of business activity before 2/14/2020.
- Leniency extended to businesses unable to hire similarly qualified employees for unfilled positions by 12/31/2020.
- Increasing to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5.
- Extending the deferral period for payments of principal, interest, and fees on PPP loans to the date that SBA remits the loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
The new rules confirm that June 30, 2020 remains the last date a PPP loan application can be approved. For more information and resources regarding PPP loan forgiveness, visit MNA’s FAQ page.
