PPP Flexibility Program

Small Business Owners

Wed Jul 08 2020 04:00:00 GMT+0000 (Coordinated Universal Time)

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On March 27, 2020, President Trump signed the Cares Act which gave financial relief resources for small business owners. Our team gave a live Q&A session for clients, community members, and business owners to help give insights as to what they could
from expect from the bill.
We invite you to watch our session and view the Q&A transcriptions to learn more.
This Act brings about new changes that are favorable for small business owners. View the changes below.

- Coverage Period Extension 
Previously, the loan forgiveness period was 8 weeks beginning after loan funds were disbursed. Now, the coverage period has been extended to 24 weeks after disbursement, or December 31, 2020 whichever is first.

If you have already applied and received funds, you are included in this coverage extension. This is terrific news for businesses affected by the previous restriction.

- Forgivable Usage Increases 
The original Paycheck Protection Program was very explicit in what loan funds could be utilized for: non-payroll cost (25%) and payroll costs (75%). Non-payroll costs consist of rent, utilities, mortgage, and interest.
The Flexibility Act increases the percentage restrictions for non-payroll costs to 40%, as it accounts for the additional 4 months of coverage. As of now, the existing restrictions on payroll and benefits remain as is.

- Restoration of Employees Extension
Remember the June 30th deadline we spoke about?? To refresh your memory, to qualify for the loan, businesses who laid off or furloughed full-time employees (FTEs) as a result of the COVID-19 pandemic were encouraged to re-hire staff by June 30th .
GREAT NEWS!!! The Flexibility Act now extends that deadline to December 31, 2020. Thus, as long as your FTEs or salary/hourly waged employees are restored to February 15th levels any time prior to the end of 2020, no reduction in forgiveness will be required.

-Relief for Businesses Rehiring FTEs 
The government has recognized the difficulties businesses may have faced re-hiring employees. Thus, if you have: a) attempted to re-hire but was denied by the employee, AND b) could not hire a “similarly qualified” employee, your forgiveness amount will not be reduced.
Additionally, if your business can provide documentation indicating an incapacity to restore an equivalent level of activity, your loan amount will not be reduced. Disclaimer, it must be clear that the business’ inability to operate at an equivalent level is a direct result of social distancing, sanitation, or safety precautions.

-Deferral Period  Extensions
Previously, the deferral period was between 6 and 12 months. Under the new Act, borrowers can defer repayment of the loan 10 months after the coverage period or whenever the forgiveness on the loan is remitted to the lender. 

-Deferral of Payroll Taxes
The payroll tax deferral now is offered to all borrowers under this Act.

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