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LEGAL UPDATES: PAYCHECK PROTECTION PROGRAM
We are closely monitoring recent developments regarding the PPP loan program. Yesterday the Senate accepted the House bill (H.R. 7010), which includes several changes to the PPP. The bill is expected to be signed into law by President Trump almost immediately.
The following are the key provisions of the proposed law:
- Extend the loan maturity to five years on all new PPP loans. Any existing PPP loans may be modified to the five-year maturity with mutual consent between lender and borrower. This change will affect any unforgiven PPP loan balance.
- Revise the original 75%-25% payroll and non-payroll threshold to a 60% payroll-40% non-payroll expense threshold.
- Extend the PPP loan origination expiration from June 30, 2020 to December 31, 2020.
- Extend the original eight-week "covered period" to 24 weeks.
- Extend the deferral period to be pegged to the date at which the forgiveness amount is remitted to the lender, or 10 months after the end of the 24-week period.
- Allow borrowers with forgiven loans to defer payroll taxes.
We here at Holtmeyer & Monson appreciate your attention and will keep you advised of current developments. Please contact Arne Monson or your Account Executive at 800.340.7304 with any questions or clarifications.