On Thursday, May 28, the House of Representatives passed a new bill (417-1 in favor), which will drastically alter the rules and timeline surrounding PPP Loan Forgiveness. While the legislation has not been signed into law yet, we anticipate that a version of it will soon. There may still be changes to the new law before it passes through Senate, but as it stands now, here are some of the major changes:
- Extend the “covered period” from 8 weeks to 24 weeks
- Change the date staff must be re-hired from 6/30/20 to 12/31/20
- Lower the minimum portion of the loan used for payroll from 75% to 60%
- Extend the payback period of unforgiven funds from 2 years to 5 years
As has been the norm, we expect more guidance and changes to come. The PFG team is staying on top of new information and guidance daily. We will continue to update our clients with the most relevant information as it becomes available.
As has been our consistent advice throughout this crazy process, we recommend you run your practice, including hiring your employees, based on the needs of the practice and your ability to do so safely in your specific location – do not let the PPP loan and the desire for forgiveness dictate how you run your business.