Key PPP Updates for Small Businesses

by Amy Tessmer, CPA and TPC CFO

If you’ve been following the news and guidance related to the Paycheck Protection Program (PPP) over the last several months, you know that it has been a rapidly evolving program with new guidance released frequently, sometimes daily or weekly.

The most significant recent development to this program came on June 5, when the Paycheck Protection Program Flexibility Act was signed into law.  This legislation relaxes some of the provisions, making it easier for small businesses to use the funds to get back on their feet and to qualify for loan forgiveness.  The key changes made by this new legislation are as follows:

  • The forgiveness time frame has been extended to 24 weeks, up from 8 weeks, meaning that businesses have more time to spend the loan funds on the types of expenses that qualify for loan forgiveness.
  • Businesses have until December 31, 2020 to rehire workers to qualify for loan forgiveness, instead of until June 30, 2020.
  • The percentage of loan funds that must be used for payroll costs to be eligible for loan forgiveness was reduced from 75% to 60%.
  • For loan funds that do not qualify for forgiveness, new PPP loans (and existing loans, if the lender agrees) have a five-year repayment term at 1% interest, instead of a two-year repayment term.
  • Businesses that took a PPP loan are now also allowed to delay paying payroll taxes. The previous guidance under the CARES Act did not allow for delayed payments if a PPP loan was taken.

Any small businesses that previously passed on the PPP may want to give it a second look to see if they qualify for the program and if it could help their business recover from the impact of COVID-19.  The deadline to apply remains listed as June 30th.

If you need a refresher on the key provisions of the original legislation, review our previous post here or contact your TPC planner – we are here to help.


Amy Tessmer, CFO, operates out of the Quad Cities office of The Planning Center, a fee-only financial planning and wealth management firm.

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