Siegel, Here Are Your Articles for Monday, June 08, 2020
Is this email not displaying correctly?
View it in your browser .
Our Website Contact Us About Us Services Tutorials Acumatica
Share Save

PPP Loan Update 6/4/2020: 

 

8 Weeks Extended to 24 Weeks!

The U.S. Senate passed the Paycheck Protection Program Flexibility Act of 2020 and it is expected to be signed by the President over the coming days. While there is no guarantee this will be enacted into law, we wanted to make you aware of the new proposed rules that provide more expansive support to small businesses impacted by COVID-19:

  • Among the key provisions is the change in the threshold for the amount of PPP funds required to be spent on payroll costs to qualify for forgiveness to 60% of the loan amount. Under the current Small Business Administration (SBA) rules, a PPP loan recipient is required to spend at least 75% of the loan proceeds on payroll costs to qualify for full loan forgiveness. The remainder of the loan proceeds can be used on qualifying expenses such as rent, utilities and interest on other obligations incurred prior to the covered period. The PPP Flex Act lowers the payroll amount to a minimum of 60% and allows up to 40% to be spent on other qualifying expenses.
  • Under the PPP Flex Act, the forgiveness period for the use of PPP funds will be extended from eight weeks after the loan is funded to the earlier of 24 weeks after origination or December 31, 2020.
  • Currently, loan forgiveness is based on employers maintaining employment and salary levels and is reduced if they are not maintained/restored by June 30, 2020. The new legislation would extend this date to December 31, 2020 giving businesses an additional six months to rehire employees or restore payroll levels without incurring any reduction in the forgiveness amount.
  • Under the PPP Flex Act, small businesses that receive PPP loan forgiveness will be permitted to defer the payment of certain payroll taxes until the end of 2020.
  • For small businesses who receive a PPP loan after the PPP Flexibility Act becomes law, unforgiven loans (or portions of loans) will be guaranteed by the SBA with an interest rate of 1% and loan term of 5 years. Loan payments will be deferred for 10 months however, interest will accrue during this time period. This would supersede the previous SBA rule that borrowers must repay the loan in two years with a 6 month deferral.
  • The PPP Flex Act extends the time to obtain a PPP loan from June 30, 2020 to December 31, 2020.

In summary, the passage of the PPP Flexibility Act is good news for both new borrowers and businesses that already received PPP loans. The bill gives businesses more time and flexibility to make qualifying expenditures for loan forgiveness under the Paycheck Protection Program, and allows businesses with forgiven loans to defer payroll taxes.

Your team from Siegel Solutions, Inc has been studying the details of the Paycheck Protection Program and the multiple rounds of guidance issued by the SBA in consultation with the U.S. Department of the Treasury. If and when the PPP Flexibility Act is signed into law, we will communicate the final changes to you along with guidance on how to properly complete your PPP forgiveness application. In the meantime, should you have any questions about your PPP loan, forgiveness eligibility or any other matter affecting your business, we welcome your questions. Please contact Jeff Siegel at jeff@siegelsolutions.com or call the office at 781-487-7000.
 

 
Share Save

Your Comments

Siegel Solutions Inc
Siegel Solutions Inc
(781) 487-7000
info@siegelsolutions.com
144 Gould Street Suite 205
Needham, MA 02494
Friend Me on Facebook
Follow Me on Twitter
Connect with me on LinkedIn
Saved Articles
Comments and Feedback
Refer A Friend
Your Privacy
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
Powered by
Copyright © IndustryNewsletters All rights reserved.

This email was sent to: jeff@siegelsolutions.com

Mailing address: 144 Gould Street Suite 205, Needham, MA 02494