Thankfully many business owners have been able to receive funding under the CARES Act’s new Paycheck Protection Program. So while we’ve all begun considering the variables to achieve full forgiveness, the Small Business Association along with the U.S.
Treasury has been working on new guidance to hopefully make forgiveness a little easier for most business owners. They’ve come up with the following:
• Expanding to 24 weeks, from eight weeks, the covered period during which PPP loan recipients can spend the funds and still qualify for loan forgiveness. The 24-week period applies to all loans made on or after June 5. Borrowers that received loans before June 5 can choose to elect an eight-week period.
• Lowering to 60% from 75% the proportion of PPP funding that must be used on payroll costs to qualify for full forgiveness.
• Expanding the term for new loans to five years from two years. Borrowers with loans received before June 5 can extend their loan term to five years if their lender agrees.
We look forward to discussing the opportunities to work with you in making the forgiveness application process smoother.
Charles F. Ott, MBA/CPA