Many small business owners know that the PPP has been nothing short of a total cluster. While it was great that the legislature initially acted so swiftly to attempt to get aid to small business owners, the PPP rules and regulations were murky and subject to changing provisions on a near-daily basis last month.
Just yesterday, the Senate passed a bill expanding the period for PPP forgiveness and modifying some provisions. Of note:
1) PPP period will be extended to 24 weeks, instead of 8; many business owners were concerned that the 8 week requirement meant they’d be paying staff while their business was not even operating. This will give business owners an opportunity to pay staff for actually working;
2) the PPP portion mandated to be used for payroll in order to get forgiveness will drop from 75% to 60%. HOWEVER, it is yet to be determined whether 60% MUST be used to get forgiveness AT ALL. When it was a 75%, the amount of forgiveness was merely reduced.
3) loan repayment term extended to 5 years, up from the 2 years initially set;
4) new exceptions that would still allow a business owner to get full forgiveness: 1. inability to find qualified workers; and 2. inability to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
We are glad the legislature has adopted these changes and hope this is signed into law shortly.