- For loans made on or after the date this legislation is enacted, the minimum maturity date of the loan is increased from two to five years.
- For any PPP loans (not just loans made on or after the date this legislation is enacted):
- The forgiveness window is changed from 8 weeks to 24 weeks, so businesses now have 24 weeks from the date of loan origination, or until December 31, 2020, to utilize the loan for eligible expenses;
- A new exception to the reduction in workforce rules is added whereby a workforce reduction is not taken into account if the business, in good faith, documents that it was unable to rehire certain employees or hire similarly qualified employees by December 31, 2020, or are unable to return to the same level of business activities due to compliance with certain governmental regulations related to COVID-19; and
- Businesses only have to use 60% of the loan for payroll costs in order to be eligible for 100% loan forgiveness. The remaining 40% must still be used for eligible expenses such as paying mortgage interest obligations, rent obligations, or covered utility payments. If less than 60% of the loan was used for payroll costs during the forgiveness window, the forgiveness percentage of the loan will be reduced.
- Businesses that receive a PPP loan are now eligible to also defer the payment of applicable employment payroll taxes under Section 2302 of the CARES Act. The exception excluding PPP recipients from this deferral was eliminated.
Partridge Snow & Hahn's Business Law Group is ready to answer further questions and to advise your business regarding PPP loans. For additional information and resources visit the firm's COVID-19 Advisory Group page.