PPP Extension Rule Revisions from the SBA 061120
Thu June 11, 2020
The Small Business Administration has issued updated Paycheck Protection Program guidance and loan application forms following the passage of the PPP Flexibility Act last week. While the new rule does not address the reforms to loan forgiveness included in the PPP Flexibility Act, it does implement the bill’s change to allow businesses more flexibility in how they allocate PPP expenses between payroll and nonpayroll costs. You can access the new resources here.
Under the new standard, PPP borrowers must use at least 60% of their loan proceeds on payroll costs, a decrease from 75%. The new rule also extends the maturity period for PPP loans made on or after June 5 to five years; for loans made prior to June 5, the rule allows borrowers and lenders to mutually agree to extend loan maturity to five years. Going forward, the NAM and ABMA will continue to press the SBA to provide the clarity our members need on PPP loan forgiveness, including timely implementation of the forgiveness reforms included in the PPP Flexibility Act.