Congress Passes Significant PPP Reform
On Wednesday, June 3, 2020, Congress passed a bill that reforms some of the forgiveness rules for the PPP Loan program (the President is expected to sign the bill soon). If you are close to ending your eight-week loan forgiveness period, the changes could have major effects on your allowable forgiveness expenditures. In general, the law extends the eight-week loan forgiveness period to a 24-week period, drops the 75% payroll expenditure requirement to 60%, and adds exceptions for borrowers who could not find qualified employees or were unable to restore business operations due to COVID-19-related operating restrictions. However, it also notes that any borrower who fails to spend 60% of the loan proceeds on payroll costs will not receive any forgiveness. The AICPA has compiled a short summary for your review. We expect further interpretations and regulations to come out over the next few weeks.
Here is a link to the text of the bill https://www.congress.gov/bill/116th-congress/house-bill/7010/text
Please don’t hesitate to contact us if you have any questions.