Insights

MPL General Counsel Corner – PPP Recipients Get A Potential Lifeline

June 01, 2020

As many of you have heard, the House (not the Senate) passed legislation (H.R, 7010) that relaxed some key restrictions that were in place under the PPP.  Below are the key components:

  • The time to seek full forgiveness would be extended to 24 weeks from 8 weeks.
  • The minimum amount of payroll that must be spent on payroll would be lowered to 60% from 75%.
  • New applications for PPP funds would be extended from June 30, 2020 to December 31, 2020.
  • The loan terms would be extended from two to five years.
  • The deferral period for interest on the PPP loan increases to 10 from 6 months.
  • PPP borrowers would also be eligible to participate in the payroll tax deferral program under the CARES Act (i.e., 50% of 2020 employer payroll taxes would be due in 2021 and the remaining 50% in 2022).
  • The bill also provides more safe harbors for employers that cannot meet the FTE requirements.

The Senate has been working on a similar bill, but the restrictions are a bit narrower.  Senator Rubio also expressed concerns that there are technical errors in the House bill.  Specifically, he highlighted the following:

  • The language around the 60% threshold is more restrictive because a business would have to use at least that amount to be eligible for any forgiveness (the current PPP rules have a sliding scale if you are below 75%).
  • There is also language that changes the requirements for rehiring employees, which Senator Rubio asserts would eliminate the employee retention mandate.

Regardless, it appears that PPP recipients will get a potential lifeline in the coming days.

Here are some other things that may be important or relevant for you:

Please see all of our prior updates at the this link or if you would like to be added to our email list, please click here

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com) or anyone in our office with questions or comments.  

Share:

Leave a Reply

Your email address will not be published. Required fields are marked *