New Options for Business Owners Under H. R.7010: Paychex Protection Program Flexibility Act!
We are thrilled that Congress, The Senate and President moved so swiftly to pass this law which gives business owners more options for applying for loan forgiveness as they start to reopen and rehire.
This video summarizes the key points and pitfalls
We are working through the calculations and considerations to enable us to compare the benefits under each of these laws. Our main goal is to help you either maximize your loan forgiveness or your loan options.
Here are some key points of the new law:
- The minimum loan term has been increased to 5 years from the original 2 year maturity
- The Covered period for applying for loans has been extended to December 31, 2020.
- The 8-week covered period for spending loan funds has been extended from the date loan was funded to 24 weeks.
- The safe-harbor or rehire provisions has been extended to allow for re-hires as businesses reopen, through December 31, 2020.
- The allocation of payroll costs to specified operating costs has been adjusted to a 60% payroll – 40% operating cost allocation.
- The bill institutes a cliff: if the business does not accomplish a 60% payroll split there is NO forgiveness.
- The Bill restores eligibility of a borrower to get employer payroll tax deferral regardless of their PPP Loan forgiveness.
- You the business owner can consider both bills: The CARES Act Paycheck Protection Program under (H.R. 748) or (H.R.7010) Paycheck Protection Program Flexibility Act and choose the right one based upon your circumstances.
For more details on the new law please follow this link to a great Forbes article which lists out the changes
Please be patient and understanding as these laws and guidelines seem to change day to day. We will continue to research and keep you up to date of any other changes as they occur.
In addition we are able to help guide you through this stage of the loan forgiveness process and are working on this all the time. We will be contacting those of you who have not yet contacted us yet to see if you would like assistance with this stage of the process.
Best wishes to you, your family and friends for health and safety through these trying times.