The federal government created the Paycheck Protection Program (PPP) on March 27, 2020 to help small businesses cope with stay-at-home orders and virus health threats. Since then, business owners expressed concerns about the amount of relief funds available and the inflexibility of some PPP requirements. As a result, the government increased the amount of relief funds available and eased the following loan forgiveness requirements:
Non-payroll expenses limit
Non-payroll related expense limit was raised from 25% to 40%. Up to 40% of PPP relief funds can now be allocated to non-payroll expenses.
Loan spending period extended from 8 weeks to 24 weeks. Business owners have an extra 16 weeks to spend PPP funds.
Repayment period extended from 2 years to 5 years. Loan payments can be spread out over 5 years and you can also pay back early with no penalties.
The rehire deadline changed from June 30 to December 31, 2020. Businesses have an extra 6 months to rehire workers or find replacements.
Rehiring requirements for loan forgiveness are eased under the following exceptions:
- A business cannot rehire the same individual who was in payroll on or before February 15, 2020.
- A business cannot hire a similarly qualified employee by December 31, 2020.
- Employers can demonstrate business activity hast not returned to the same level prior to February 15, 2020.
There are still over $100 billion dollars available for loans as of the publication of this post. You still have time to receive relief funds. The application deadline is June 30, 2020.
Apply for a PPP loan here.
As more information comes in, we will be publishing on our social media, blog and future newsletters.
For more details on the PPP Flexibility Act click here.