U.S. President Signs Legislation Easing SBA Loan Program Requirements
On June 5, President Donald Trump signed legislation into law that eases rules for how small businesses must spend proceeds from their U.S. Small Business Administration Paycheck Protection Program (PPP) loans.
Specifically, the bill:
- Extends the time that PPP funds have to be used, from eight weeks to 24;
- Extends eligibility for the program from June 30, 2020 to December 31, 2020;
- Extends the date that businesses have to rehire employees, and qualify for purposes of loan forgiveness, from June 30, 2020 to December 31, 2020;
- Extends the period for paying back portions of the loans that are not forgiven from two years to at least five years;
- Changes the SBA-imposed requirement that 75 percent of PPP loan proceeds be used to pay for payroll expenses and no more than 25 percent on rent and utilities to at least 60 percent of loan must be used for payroll; and
- Ensures that successful PPP applicants would now be eligible to defer 2020 payroll taxes, something that was prohibited under the program as originally written.
These changes took effect as soon as the bill was signed. Want more information about how PPP loans are forgiven? Check out this video from the U.S. Chamber of Commerce.