On June 5, 2020, the President signed the Paycheck Protection Program (PPP) Flexibility Act, which resulted in some important changes to the loan forgiveness rules. The highlights of these changes are as follows:
- The covered period is extended from eight weeks after the date of loan disbursement to 24 weeks, allowing PPP borrowers more time to spend the loan proceeds on eligible expenses.
- The requirement that 75% of a borrower’s loan proceeds be used for eligible payroll costs was lowered to 60%.
- For PPP loans that were SBA approved on or after June 5, 2020, the loan term is increased from two years to five years.
- The deferral period for borrower payments of principal, interest, and fees, is deferred to the lesser of 10 months after the end of the borrower’s loan forgiveness covered period or the date that the SBA remits the borrower’s loan forgiveness amount to the lender.
- Provides safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity, or are unable to rehire individuals who were employees, on or before February 15, 2020.
For more details on these changes, visit www.sba.gov and home.treasury.gov
On June 17, 2020, the SBA, in consultation with the U.S. Department of the Treasury, released two Paycheck Protection Program (PPP) Loan Forgiveness Applications, including an EZ version that requires fewer calculations and less documentation for eligible borrowers. Details regarding eligibility for which application to use are available in the application instructions.
Effective Monday, August 10, St. Mary's Bank is able to accept PPP Loan Forgiveness Applications for our members through our online portal. PPP Business Loan members will receive instructions by email. When you are ready to apply for PPP Loan Forgiveness, please use this form to request access to the online portal.