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PPP Extension Bill Signed Into Law

Chris Gaetano
Published Date:
Jun 8, 2020

A bill loosening some of the requirements around the Paycheck Protection Program (PPP) was signed into law over the weekend after clearing the Senate last week, said MarketWatch.

The new law will extend the eight-week window for using PPP loans to 24 weeks, giving small businesses more time to use the money and still have their loans forgiven. It will also extend the deadline to rehire workers until Dec. 31; reduce the amount that must specifically be used on payroll  from 75 to 60 percent (although now this 60 percent is a cliff rather than a tapering-off point); give borrowers five years instead of two to pay back unforgiven debt; and allow businesses to defer payroll tax.

Furthermore, it will allow certain exemptions to the employee-retention requirement. Borrowers would not be penalized if they could, in good faith, document an inability to rehire individuals who had been let go or hire new qualified employees, or document an inability to return to the same level of business activity as before due to compliance with the requirements established by health authorities.

More changes to the program could happen in the future: MarketWatch said that senators had to choose between either passing the program despite reservations or modifying the bill and sending it back to the House for another vote, which would have delayed matters further. Ultimately, senators chose the former, with the thought that further legislation could address their concerns.

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