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The House and Senate both passed the Paycheck Protection Program Flexibility Act, H.R. 7010, and it is expected to be signed into law by the President today.
The Act makes significant changes to the Paycheck Protection Program, making loan forgiveness much easier for many businesses struggling with meeting the original requirements and timelines. By granting greater spending and rehiring flexibility, more time to use the funds, more time to re-hire employees, and a decrease in the mandatory minimum funds to be spent on payroll costs, more borrowers will be able to meet the loan requirements and achieve complete loan forgiveness.
The CARES Act allows employers to defer the deposit and payment of the employer's share of Social Security taxes and self-employed individuals to defer payment of certain self-employment taxes.
Now that small businesses and organizations are starting to receive Paycheck Protection Program (PPP) funding, attention has turned to the next and most vital phase: loan forgiveness. If borrowed funds are spent as intended on payroll, mortgage interest, rent and utilities in the eight weeks after receipt, those expenditures are potentially eligible for complete, tax-free forgiveness.
Today the President signed a $484 Billion bill that provides $320 Billion in new funding for the Paycheck Protection Program. It also includes $75 billion for hospitals, $25 billion for coronavirus testing and $60 billion for the Small Business Administration’s Economic Injury Disaster Loan program.
The SBA expects to start taking applications for the second round of funding for the Paycheck Protection Program on Monday, according to SBA Region 5 Director Rob Scott.