PPP changes to PubL: 116-136 related to H.R. 7010

Latest Action: 06/05/2020 Signed by President.

This is just a summary, please read the bill that passed completely as you did with HR 748 CARES Act Public Law 116-136.

H.R.7010 - Paycheck Protection Program Flexibility Act of 2020

• "minimum maturity of 5 years"

• Extension Of Covered Period December 31, 2020

• Usage period changed from 8 weeks to 24 weeks from disbursements:

• Loan forgiveness exemption based on employee availability. If you gave a good faith effort to bring back your old employees or to hire replacement employees and couldn't do so by the time you filed for your forgiveness your employee count will not be used to reduce your loan forgiveness amount.

• Forgiveness exemption, you are unable to return to level of business activity of prior to Feb. 15, 2020 because of HHS, OSHA or CDC policy and rules introduced between March 1, 2020 and December 31, 2020.

• The required percentage amount used for payroll has been reduced to 60%. (This is not saying you can pay your employees less.) This means you only have to provide proof that 60% of the total PPP funds was spent on payroll to be able to have the loan forgiven. "To receive loan forgiveness under this section, an eligible recipient shall use at least 60 percent of the covered loan amount for payroll costs..."

• If you received your PPP loan before HR 7010 was signed into law you can opt to end your loan on the 8th week as it was previously published in HR 748.

• Deferral Period has changed from 6 months to the day your lender receives the forgiveness amount to payoff your PPP loan. (This is an extension to have no interest or principal payment on the forgiven part of the loan. "including payment of principal, interest, and fees, until the date on which the amount of forgiveness determined under section 1106 of the CARES Act is remitted to the lender."

• If you are planning on using the PPP as a loan and not ask for the loan to be forgiven your first payment according to HR 7010 will start 10 months after the end of the covered period which is either 24 weeks after your loan disbursement or from Dec. 31, 2020.

• Section has been removed in: SEC. 2302. Delay of payment of employer payroll taxes.
  "(3) EXCEPTION.&mdashThis subsection shall not apply to any taxpayer if such taxpayer has had indebtedness forgiven under section 1106 of this Act with respect to a loan under paragraph (36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102 of this Act, or indebtedness forgiven under section 1109 of this Act."

This is just a quick overview of things I feel might help many of you. Ultimately it's your responsibility to read all laws, policy, rules, directives and guidance for any and all federal disaster assistance programs you participate in.

If I missed anything feel free to add it to the clarification form.

References:

• H.R.7010 - Paycheck Protection Program Flexibility Act of 2020 

• H.R.748 - CARES Act