SBA/Treasury Clarify Paycheck Protection Program Flexibility Act
Since the Paycheck Protection Program (PPP) began in early April, the PPP has experienced many changes, and will continue to do so. The most recent change is the passage of the Paycheck Protection Program Flexibility Act (PPPFA). A copy of this new law can be found here.
One key revision under the PPPFA is that it reduced the payroll expenditure requirement from 75% to 60%, which is good news for borrowers. However, the statutory language suggested that borrowers must spend at least 60% on payroll or they will not receive any forgiveness:
“To receive loan forgiveness under this section, an eligible recipient shall use at least 60 percent of the covered loan amount for payroll costs…”
The Treasury and SBA released a joint statement yesterday, which can be found here, clarifying that borrowers can still seek partial forgiveness if they do not meet the 60% payroll expenditure threshold. This is welcome news for borrowers.
The statement also confirmed that the deadline to apply for a PPP loan remains June 30, 2020.
The SBA, in consultation with Treasury, will promptly issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing the legislative amendments to the PPP.
SBA Equal Employment Opportunity Poster
If your business received funding from the SBA, you must display an Equal Employment Opportunity Poster in your workplace. That poster can be found here and should be visible to the general public, job applicants, and employees.
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.
Disclaimer: Please consult with your own legal and tax advisors for advice regarding these changes and complying with the terms of your PPP loan.