PPP Updates: Deadline Extended, Partial Loan Forgiveness
By Jack Gannon Jr.
Attorney at McGuire, Craddock & Strother, P.C
July 2, 2020
The application deadline for the Paycheck Protection Program (“PPP”) has been extended from June 30 to August 8 of this year, giving borrowers additional time to apply for PPP loans. The relevant bill was passed by the Senate on June 30 and then by the House on July 1. Had the PPP expired on the original deadline of June 30, over $130 billion of potential loan funds would have remained unused.
In other PPP news, the SBA and Treasury clarified a point of confusion in the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”). Under the Flexibility Act, there was concern that, if at least 60 percent of PPP loan funds are not used for payroll costs, then the borrower would not be eligible for any loan forgiveness whatsoever. The SBA and Treasury have clarified in a joint statement that, if less than 60 percent of PPP loan funds are used for payroll costs, then the borrower may still be eligible for partial loan forgiveness. However, at least 60 percent of the loan forgiveness amount (not of total loan proceeds) must be comprised of payroll costs.
In an earlier article, we summarized key information that borrowers under the PPP need to know. We then provided important PPP updates in a subsequent article. If your business has obtained or plans to obtain a PPP loan, we encourage you to review those articles for guidance.
Should you have any questions or need assistance regarding your PPP loan, please contact Jack Gannon Jr. at 214-954-6808 or firstname.lastname@example.org, or reach out to any other attorney of our firm.
This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and legal questions. The information contained herein is current as of the date of this article.