Paycheck Protection Program Updates
on August 31, 2020
There have been a few changes to the Paycheck Protection Program (PPP) since April. In our recent Town Hall Webinar, Craig Douglas went over this program in detail. The application window for this program was closed for the second time on August 8.
Watch the Recording
To refresh your memory, the PPP has a max loan size equivalent to 2.5 times the employer’s average monthly payroll, up to $10 million. The PPP loans have an interest rate of 1%. Loan payments will be deferred for 6 months. No collateral or personal guarantees are required and neither the government nor lenders will charge any loan fees.
Proper use of funds
Loan dollars can be used by employers to cover:
- Payroll: wages/salaries, retirement contributions, health benefits, sick/medical leave
- Mortgage interest
PPP Features that Have Changed
The PPP Flexibility Act of 2020 was signed on June 5, 2020 and has made some changes to the program.
- Loans issued prior to June 5 have a maturity of 2 years.
- Loans issued after June 5 have a maturity of 5 years.
- 60% of the loan must be used to cover payroll expenses (formerly 75%)
- Moved deadline to rehire employees from June 30 to Dec. 31, 2020
- Defer the 6.2% payroll tax that employers are charged for 2 years
- Will cover 24 (formerly only 8) weeks of payroll plus other expenses
- Loans rec’d prior to June 5 can use the 8-week period if they want to
There may be more changes to come. Keep watching the Essentially Women Newsletter for updates. Subscribe to the VGM Government Relations blog to get updates as they are released.
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