“Don’t know if I’m coming up or down.” -Jimi Hendrix
In the grand scheme of what’s going on in the US right now…this is not at the top! However, changes have been made to the PPP Loan forgiveness plan and if you’re keeping up with them you probably ‘Don’t know if it’s day or night…is it tomorrow or just the end of time?’
This week the Senate approved changes to PPP loan forgiveness as previously approved by the House. The bill still needs approval from the President but here is what we know so far:
-PPP borrowers can choose to extend the 8 week period to 24, or they can keep the original 8 week date.
-The payroll expenditure requirement drops from 75% to 60%. This new 60% has to be for payroll or none of the loan will be forgiven.
-PPP borrowers can use the new 24 week period to restore their workforce levels and wages to the pre-pandemic levels for full forgiveness. That makes Dec. 31 the new deadline instead of June 30.
-New legislation includes two exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce.
-Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.
-The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.