The Paycheck Protection Program, originally enacted under the CARES Act at the end of March, has been amended under new legislation passed last week. Changes to the program make it more adaptable for small businesses and relieve some of the requirements for loan forgiveness.
$130 billion in funds for PPP loans are still available to small businesses with fewer than 500 employees, but the deadline to apply is June 30. If the new provisions make PPP a viable option for your business, contact your local lender for information about applying.
Here are some of the changes approved under the new legislation:
- Payroll and operating expenses can now be extended to cover at 24-week period, up from the original eight weeks. The extended period is designed to allow more businesses to bring back employees and reach full forgiveness. This provision accounts for businesses unable to bring back workforce until stay-at-home orders were lifted. The covered period cannot extend beyond December 31, 2020.
- Businesses are now able to adjust calculations for forgiveness if they are unable to fully restore their workforce due to COVID related operating restrictions or inability to find qualified employees.
- Payroll expenditure requirements drop from 75% of the loan to 60% of the loan for forgiveness.
- New borrowers now have five years to repay the loan instead of two years. The interest rate remains at 1%.
- Businesses with a PPP loan can defer payroll taxes under the new legislation.
Implementation details of the new legislation will be available on the website of the Small Business Administration soon. Here is the release from SBA describing the changes. SBA.gov does have a tool to help you find a lender, but local banks and credit unions recommend beginning where you normally do business.
The new legislation is available here.
Webinars on PPP:
The Chamber will host Navigating the Paycheck Protection Program on June 18, 11 am – 12 pm, featuring:
- Tony Joyce, EVP Senior Loan Officer, Chelsea Groton Bank
- Paul Filippetti, Partner, Hoyt, Filippetti & Malaghan, LLC
Connecticut’s Small Business Development Center will be hosting a webinar on these new provisions on June 10, 11 am- 12 pm.
As information becomes available, we will share it in our blogs and on our COVID-19 Updates page under Business Economic Assistance Resources.