June 16, 2020
Legislative Updates to PPP Forgiveness
Under the Paycheck Protection Program (PPP) created by the
CARES Act, loans may be forgiven if borrowers use the proceeds
to maintain their payrolls and pay other specified expenses. Congress recently changed the rules regarding loan forgiveness.
- Extending the 8-week covered period to 24 weeks and extending the rehiring deadline
- Increasing the percentage of forgivable funds that can be used for nonpayroll expenses (such as rent, utilities, mortgage interest, etc.) from 25% to 40% of the total loan amount
- Extending the program from June 30 to December 31
- Extending loan terms from two to five years
The Treasury Department and Small Business Administration are
responsible for updating the application form and instructions for
loan forgiveness. You can find the most up-to-date information here.
PPP borrowers must apply for loan forgiveness with the
lender that processed the loan. This guide is designed to
help borrowers understand the process by which their loan
forgiveness amount will be calculated and the overall approach
of the loan forgiveness process.