The new paycheck protection guidelines released on June 3rd, makes it much easier for business owners to benefit from FULL debt forgiveness.
Some of the recent updates include:
The debt-forgiveness period extends from 8 to 24 weeks after receipt of the PPP loan. This means business owners have more time and flexibility to use funding to keep their business afloat.
Business owners may now use 60% of loan proceeds for payroll costs and 40% for all other qualifying expenses like rent, utilities, and mortgage interest.
Deadline to use all funds received under the PPP and submit debt forgiveness applications has been extended to December 31, 2020.
If for reasons outside of your control, you were unable to use the full 60% on payroll costs, you may apply for partial debt forgiveness.
Loan maturity has now moved from 2yrs to 5yrs if your application was approved after June 5th, 2020 at an interest rate of 1%.
If your loan was approved before June 5th, 2020 it is up to the discretion of your lending institution whether to extend your loan maturity date.
Business owners must also:
Maintain the same payroll levels prior to Feb 15th, 2020. There should be no increase in payroll levels that may be construed as means to exhaust PPP funding.
Keep records of attempts to re-hire employees just in-case you may need to apply for partial forgiveness.
If you have not yet applied for the PPP and believe your business needs funding, you may want to consider the paycheck protection program, especially since debt forgiven is tax-free. Paycheck Protection application deadline is June 30, 2020.