MPL General Counsel Corner – PPP Recipients Get A Potential Lifeline
- 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:
- Litigation Update – Law360 puts out a weekly overview of the various coronavirus litigation actions. These will surely be an ever present part of our system for many years to come.
- PA State Legislature Approves $225M for Small-Biz Relief – Check out the latest update from Joel Berg @ biznewsPA.
- PA Businesses are joining the call for Coronavirus Liability Protection – The PA Chamber is joining healthcare industry groups in pushing for civil immunity related to the Covd-19 Pandemic. This mirrors what we are hearing from the Republicans on the national level.
- Upcoming Webinars and Helpful Resources