Yesterday Treasury Secretary Mnuchin and SBA Administrator Jovita Carranza issued a joint statement regarding the imminent release of updated guidance. Although we are awaiting the release of the full guidance, at this point we know:
1. THE LAST DATE ON WHICH A PPP LOAN APPLICATION CAN BE SUBMITTED TO A LENDER IS JUNE 30, 2020. AFTER THAT DATE, NO PPP LOAN APPLICATIONS WILL BE ACCEPTED!!!!!
2. The covered period for loan forgiveness is extended from 8 weeks to 24 weeks, meaning borrowers will have 24 weeks from the date of receipt of funds to spend them, not 8 weeks as initially indicated.
3. The requirement that 75% of the funds must be spent on payroll expenses has been lowered to 60%, which means as long as 60% of the PPP funds are spent on payroll expense, the loan will be forgiven.
4. There are now safe harbors for employers who are unable to return to pre-February 15, 2020 levels by December 31, 2020. There are actually two safe harbors. One addresses return to pre-February 15, 2020 business activity, and the other addresses pre-February 15, 2020 employment levels.
STAY TUNED FOR ADDITIONAL INFORMATION ONCE THE UPDATED GUIDANCE IS RELEASED.