Congress Agrees on Changes to PPP Loans

June 3, 2020 the Senate approved H.R. 7010 that would improve the terms of PPP loans. This bill still needs the signature of the President.

You can read more here.

Key takeaways:

* Revisions are too late for many who are already nearing the end of their eight-week window and have spent down the funds, not necessarily in the best interest of the business.

* The maturity date will be extended from two years to five years.

* The covered period to use funds will be extended from 8 weeks to 24 weeks. This is extremely beneficial to those business that have not yet been released from the shut-down orders. Again, not helpful if those businesses have already paid employees, but are not open or open to pre-COVID capacity.

*  The bill increases the amount of the PPP loan used for non-payroll expenses to 40%, the catch is, if you do not meet the 60% payroll qualifier - NONE of the loan will be forgiven.

* Currently, to the loan amount forgiven, you must maintain the same "FTE" Full Time Equivalent hours and wages that were in place as of February 15, 2020 before June 30, 2020. The new deadline would be extended to December 31, 2020.