The Senate has approved the new changes to the PPP Loan and the bill is on the way to the President for signature. Once this is done you will want to make sure you have the NEW forgiveness forms.
From my internet research:
“The Senate just approved the House bill which would extend the loan period out to 24 weeks and changed the payroll/non-payroll split to 60/40 instead of the previous 75/25. The bill also extends the non-forgivable loan portion out to 5 years, although with 24 weeks to essentially spend 2.5 months of payroll which the loan amount was based on. The extension out to 24 weeks should take a lot of the guesswork out of which payroll periods to include or the decisions surrounding whether to use the alternative payroll period or take the cash or incurred method, as most companies should be able to more than cover the loan with just regular payroll now within 24 weeks.
A key new provision is the exemption based on employee availability. Basically, if as a result of COVID restrictions a business was unable to reestablish their workforce due to social distancing, other measures, forced closures, etc. this will not impact the calculation and forgiveness reduction. That provision (along with the extended time period) should be really good for restaurants and other such businesses who were obviously unable to operate at full staff/capacity.
One important item to note is that the bill now requires at least 60% of the loan to be spent on payroll, meaning if companies don’t hit a minimum (e.g., a floor of) 60% payroll, no amount of the loan will be eligible for forgiveness. Again, with 24 weeks, this shouldn’t be an issue for most companies, but this is important to note.”
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Please note that information contained in this news alert is not and should not be construed as legal advice or opinion nor does this information alert create an attorney-client relationship.