The PPP, or Paycheck Protection Program provided business owners across the country with the relief they needed to continue paying employees and to keep their businesses afloat. However, more and more small business owners began to realize that the aid provided by the PPP had its limits, and as a result, they voiced their concerns. In response, on May 27, 2020, the House approved the Paycheck Protection Program Flexibility Act, or PPPFA, on June 3, 2020, the Senate passed the PPPFA, and on June 5, 2020, President Trump signed it into law. Please continue reading and speak with our experienced Bergen County business law attorneys to learn more about the PPPFA and how it may help you.
What’s new in the PPPFA?
To start, while the PPP required business owners to spend 75% of the loan on payroll, the PPPFA now only requires business owners to spend 60% of the loan on their payroll. Additionally, while the PPP required business owners to spend their loans within 8 weeks of receiving them, the PPPFA now extends that timeframe to 24 weeks, thus giving business owners the flexibility to spend their loans as they see fit for the remainder of the year. The new law also gives small business owners until December 31 to rehire employees, from the initial date of June 30, which allows their salaries to count towards forgiveness.
Under the new law, small business owners can still receive loan forgiveness if they can prove they are unable to hire someone who was an employee on/before February 15, 2020, if they are unable to hire a similarly qualified employee on/before December 31, 2020, or if they are unable to resume the same caliber of business activity as they had before February 15, 2020. Finally, the PPPFA now extends the amount of time business owners have to repay their loans from 2 years to 5 years in the event that certain portions of their loans are not forgiven.
If you have any additional questions about the PPPFA and how it may benefit your small business, please do not hesitate to give our knowledgeable Bergen County business law attorneys a call today.
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