Partial Forgiveness of PPP Loan If 60% Threshold Not Met
In an article by Jeff Drew covering new legislation signed on June 5, 2020, The Journal of Accountancy reports several changes made to the Paycheck Protection Program:
- Reduction of the percentage of loan proceeds that must be spent on payroll costs reduced from 75% to 60%;
- Extension of the “covered period” for use of funds from eight weeks to 24 weeks (or 12/31/2020, if earlier);
- Extension of the period of time for employers to reverse decreases in employment and/or wage levels that occurred between February 15 and April 26, 2020 from June 30, 2020 to December 31, 2020;
- Lengthening the period of loan maturity from two years to five years; and
- Permission for borrowers to defer payment until loan forgiveness is determined, instead of six months after loan disbursement.