Congress recently passed legislation to provide greater flexibility to Paycheck Protection Program borrowers. Here are a few of the important changes that may impact you:
- Extended covered period for loan forgiveness from eight weeks after the date of the loan disbursement to 24 weeks. This provides greater flexibility for borrowers to qualify for loan forgiveness.
- Lowered the amount of the loan that must be used for payroll costs from 75 percent of the loan to 60 percent of the loan.
- Expanded safe harbor from reductions in loan forgiveness for businesses that are unable to return to the required level of staffing as before coronavirus if the business is complying with federal health requirements.
- Provide safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for businesses that are unable to rehire previous employees or hire similarly qualified employees by December 31, 2020.
- Increase to five-year the maturity of PPP loans that are approved by the SBA on or after June 5, 2020.
- Extend the deferral period for borrower payments to the date the SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for forgiveness, ten months after the end of the borrower’s loan forgiveness covered period).
These changes are significant and may change how you calculate your PPP loan forgiveness. If you are a PPP borrower and have any questions, contact us to speak with a business adviser.
Contact us at 541-383-7290 or sbdc@cocc.edu. Not in Central Oregon? Locate your local SBDC at bizcenter.org. Oregon Small Business Development Centers across the state are open and available to assist businesses. Centers are currently operating virtually.
