SALT LAKE CITY – The Paycheck Protection Program (PPP) Flexibility Act passed last week gives small business owners more time to apply for loan forgiveness.
This law will affect 4.5 million across the country whose loans total more than $ 500 billion.
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“This bill will give businesses more time and flexibility to keep their employees on the payroll and keep operations going as we reopen our country safely. We look forward to getting the American people back to work as quickly as possible, ”SBA Administrator Jovita Carranza and US Treasury Secretary Steven T. Mnuchin said in a joint statement.
In Utah, nearly 49,000 small businesses received PPP loans, totaling $ 5.2 billion.
“This will extend the period covered for loan cancellation from eight to 24 weeks after the loans are disbursed, so that small business owners can keep their employees paid,” said SBA Utah district manager Marla Trollan. “It also gives more flexibility in how the funds are used.”
Upcoming procedures under the new PPP flexibility law:
The following changes accompany the new PPP flexibility law:
- Extend the period covered for loan cancellation from eight weeks after the loan disbursement date to 24 weeks after the loan disbursement date.
- Lower the requirement that 75% of a borrower’s loan proceeds be used for salary costs during the period covered by the loan cancellation from 24 weeks to 60%. If a borrower uses less than 60 percent of the loan amount for these costs, he will continue to be eligible for a partial loan forgiveness.
- Provide protection against reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers who are both unable to rehire people and / or unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
- Increase the maturity of SBA-approved PPP loans to five years (based on the date the SBA assigns a loan number) starting June 5, 2020.
- Extend the deferral period for payments by the borrower of principal, interest and charges on PPP loans until the date the SBA remits the borrower’s loan forgiveness amount to the lender.
- In addition, the new rules will confirm that June 30, 2020 remains the deadline by which a PPP loan application can be approved.
