Here's an email I just got from my bank. Sorry for the formatting....
Good morning!
Quite a few updates and changes have emerged as of late last week. President Trump signed legislation adjusting the Paycheck Protection Program. Below is a nice summary that was sent out by the ICBA (Independent Community Bankers of America) this morning.
Additionally, we have been made aware of an online resource to assist with the preparation of the forgiveness calculations. This recourse is being recommended highly throughout the industry. I am sure they will be making adjustments to the calculations with the new legislation signed, but this could be a very useful tool for you in the process of completing your PPP forgiveness application.
Link:
https://www.ppp.bank/
From their website: PPP.BANK is a free, secure resource for small businesses, non-profits, and sole proprietors across the United States who received a Paycheck Protection Program (PPP) loan and are now applying for forgiveness. This website automates the 11-page forgiveness application and results in a .pdf that can be provided to the lender.
ICBA Article: New legislation looks to address PPP restrictions
Jun 05, 2020
On June 5, President Donald Trump signed legislation to address restrictions on the Small Business Administration’s (SBA) Paycheck Protection Program (PPP).
While further guidance and clarification from the SBA and Treasury is likely, here is a summary of the provisions that appear in the Paycheck Protection Program Flexibility Act.
Specifically, the law:
• Extends the covered period during which the loan may be used for forgivable expenses from eight weeks following disbursement of the loan to 24 weeks from loan disbursement or Dec. 31, 2020, whichever is earlier. Borrowers who received loans before June 5 may elect to continue using the eight-week covered period.
• Lowers the amount that must be spent on payroll costs from 75 percent to 60 percent. The new 60 percent threshold is now a cliff, meaning that borrowers must spend at least 60 percent on payroll or none of the loan will be forgiven.
• Extends the period in which employers may rehire or eliminate a reduction in employment, salary, or wages that would otherwise reduce the forgivable amount of a PPP loan to Dec. 31, 2020. However, the forgivable amount will be determined without regard to a reduction in the number of employees (compared to Feb. 15, 2020) if the recipient is (1) unable to rehire former employees and is unable to hire similarly qualified employees by Dec. 31, or (2) unable by Dec. 31 to return to the same level of business activity that existed before Feb. 15, 2020, due to compliance with federal requirements or guidance related to COVID-19.
• Replaces the six-month deferral of payments due under PPP loans with deferral until the date SBA pays the lender the amount of loan forgiveness. If a borrower fails to apply for loan forgiveness within 10 months after the last day of the covered period for forgiveness, the borrower must begin to make payments of principal, interest, and fees on its PPP loan.
• Establishes a minimum maturity of five years for new PPP loans as opposed to the current two-year maturity date. The five-year maturity takes effect on the date of enactment and will apply to any PPP loan made on or after June 5. Lenders and borrowers, however, may mutually agree to modify the maturity terms of prior-disbursed PPP loans.
• Eliminates a provision that makes PPP loan recipients who have PPP debt forgiven ineligible to defer payroll tax payments.
• The final date to obtain a PPP loan remains June 30, 2020.
This law will likely be subject to additional guidance by SBA and Treasury. Small-business borrowers should have a firm understanding of the provisions above and any related guidance to ensure they meet the criteria for loan forgiveness.
Please note that the last part of the article is of high importance. With the changes, it is highly likely that there will be additional guidance from the SBA and the Treasury. As that guidance emerges, I will forward out for your review.