A joint statement was released June 8, 2020 by Treasury Secretary Steven T. Mnuchin and SBA Administrator Jovita Carranza regarding enactment of the Paycheck Protection Program Flexibility Act.
“The forgivable loan program, PPP, is dedicated to providing emergency capital to sustain our nation’s small businesses, the drivers of our economy, and retain their employees,” said Jovita Carranza. “CDFIs provide critically important capital and technical assistance to small businesses from rural, minority and other underserved communities, especially during this economically challenging time.”
Key program changes include:
- The new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.
- Providing a “safe harbor” from reductions in loan forgiveness based on reductions in full-time employees if unable to 1) resume level of pre COVID-19 business activity due to worker or customer safety compliance issues; or 2) rehire individuals/hire similarly qualified employees for unfilled positions
- Increasing the loan term for five years (for loans approved by the SBA on or after 6/5/20) and extending the deferral period for borrower payments
- A reduction in the minimum percentage of funds required to be spent on payroll from 75% to 60%
- Extending the loan forgiveness covered period from eight to 24 weeks after the date of loan disbursement.
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