Paycheck Protection Program Update
The President signed the Paycheck Protection Program Flexibility Act of 2020 (PPPFA) on June 5, 2020.
The Act made a number of changes to existing PPP guidance, including:
- Requirement that 75% of PPP loan proceeds be used for payroll is reduced to 60%.
- Borrowers can extend the “Covered Period” to 24 weeks instead of the original 8 weeks.
- Borrowers and lenders can agree to extend existing loan repayment periods to 5 years instead of the original 2 years. Loans made after the law’s passage will have a 5 year repayment period.
- Significant changes in FTE restoration requirements, including exemptions for employers unable to return to normal operation levels due to COVID related restrictions.
The AICPA’s PPPFA summary can be read here.
The AICPA’s PPP FAQ page can be found here.
U.S. Treasury announcement can be read here.
Many questions regarding loan forgiveness remain unanswered. Guidance will be posted as it becomes available.
