PPPFA

On Friday, June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA). 

Below is a summary of the modifications to the  Paycheck Protection Program:

  • You now have 24 weeks. If you received PPP funds, you can choose to extend the 8-week period to 24 weeks, or you can keep the original period if that is a better answer for you.  The original rules were that you had to use the funds in the 8-week period from when funds were received.  The PPPFA extends that time period to 24 weeks.  If you are in the process of receiving funds, you will receive the 24 weeks automatically.
  • Deadline now is December 31.  You can use the 24-week period to restore your workforce to pre-COVID levels in order to achieve full forgiveness.  That deadline is no longer June 30 – it is now December 31 (if your 24-week period goes that far).
  • Exceptions for not reaching pre-COVID employment levels.  If you can’t reach your pre-COVID workforce level, there is a provision in the bill that still allows for full forgiveness if:
    • you cannot rehire an individual who was an employee that was furloughed
    • you cannot find similarly qualified employees or
    • you were unable to restore business operations to pre-COVID levels due to COVID-related operating restrictions (requirements or guidance issued by CDC or OSHA)
  • The payroll expenditure threshold is now 60% instead of 75%.  However, now that is all or nothing.  You must spend at least 60% on payroll or none of the loan is forgiven.  Payroll costs include regular compensation, commissions, bonuses, payments for leave, separation payments, employee benefits (health care premiums, retirement contributions, etc.).
  • Repayment period extended.  The repayment period of non-forgiven loans is now 5 years (instead of 2) and is still at 1% interest.
  • Payroll tax payment deferral.  Payroll taxes can now be deferred if there is loan forgiveness.  This is a reversal of the original PPP.  The employer portion of employment taxes can be deferred to 50% due 12/31/21 and 50% due 12/31/22.

SBA Press Release (6.8.20)

COVID-19 RESOURCES FOR MANUFACTURERS