New PPP Updates: What Business Owners and Employers Need to Know

PPP loans; What Business Owners Need to Know

On June 5, 2020, the PPP Flexibility Act was signed into law. The Flexibility Act expanded on certain provisions of the original CARES Act regarding the Paycheck Protection Program (“PPP”). First, the term of PPP loan has been extended. Originally the loan term for the PPP was for one year and now it has been extended to 5 years. The extended repayment period applies only to PPP loans made after June 5, 2020, but lenders and borrowers can renegotiate the maturity of any previously existing PPP loans.

Secondly, the PPP was meant to cover 8 weeks of payroll and the funds needed to be used within 8 weeks after the date of the origination loan.  The time to use the loan proceeds has now been extended to 24 weeks from the date of the loan or until December 31, 2020, whichever occurs first. If a business received PPP funds as of June 5, 2020, they can now choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. New PPP borrowers will automatically have a 24-week period, but not beyond December 31, 2020.

Additionally, a business now may not receive a reduction in forgiveness amount for having a reduced in the number of employees if the business in good faith can document an inability to rehire individuals who were employees on 2/15/2020 and an inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020.


Can document an inability to return to the same level of business activity as such business was operating at before 2/15/2020 due to compliance with requirement established/guidance issued by CDC OSHA or Health and Human Services during period of March 1, 2020 and ending on 12/31/2020 related to maintenance of standards for sanitation, social distancing or other safety requirement.

Also, loan recipients now only have to use 60% of the loan for payroll costs and can use 40% for other approved expenses. Loan recipients will also now have their loans deferred for 10 months versus the original 6-month loan deferment.

Lastly, under the original CARES Act,  a business was allowed to delay payment of employer payroll taxes through December 31, 2020 and the payments payable over the next two years.  The caveat to this was that if a business took the PPP loan, they were ineligible for this benefit. The new law now allows for any PPP borrower to delay payment of its payroll taxes like other businesses.

Then it comes to the different COVID-19 Federal Stimulus Packages, there’s a lot for employers and business owners to know. It’s important to understand all your options and develop a strategy to maximize the benefits. Epiphany Law attorneys are able to partner with you and create a plan that will help your business achieve your desired results. You can call us at 920-996-1000 or contact us here. 

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