Paycheck Protection Program:
The Paycheck Protection Program (PPP) may be undergoing some changes as both the Senate and the House consider bills to extend the PPP and change many of the terms. The Senate’s bill may move through the Senate as early as today. The Senate’s bill would:
- Extend the deadline to apply for a PPP loan from June 30, 2020, to December 31, 2020;
- Allow borrowers 16 weeks to use their loan funds, instead of 8 weeks;
- Allow borrowers to use loan funds to purchase personal protective equipment for employees and to pay for adaptive investments needed to reopen safely;
- Clarify that borrowers who have maintained payroll for 8 weeks will not lose loan forgiveness due to the extension of the program to 16 weeks; and,
- Ensure that lenders are not held liable for the borrower certification and documentation they provide when applying for a PPP and subsequent forgiveness. In addition, lenders who followed PPP guidance released by SBA/Treasury are not held liable for doing so if that guidance changed.
The House is expected to vote next week on a bill with bipartisan support. The House’s bill would:
- Allow forgiveness for expenses beyond the 8-week covered period.
- Eliminate restrictions limiting non-payroll expenses to 25% of loan proceeds.
- Eliminate restrictions that limit loan terms to 2 years.
- Ensure full access to payroll tax deferment for businesses that take PPP loans.
- Extend the rehiring deadline to offset the effect of enhanced Unemployment Insurance.
MBA’s team will be monitoring this legislation and will provide additional information as it is available.
The coronavirus has created many issues for employers to navigate. You can find MBA’s updates on these issues by going here. MBA will continue to update you as the coronavirus pandemic continues to impact employers.