Paycheck Protection Program changes and deadline

June 12, 2020

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.

Spending extension

Loan spending period extended from 8 weeks to 24 weeks. Business owners have an extra 16 weeks to spend PPP funds.  

Repayment period

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.

Rehiring deadline

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

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.

Javier Contreras
June 12, 2020

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