Joint
Statement by SBA Administrator Jovita Carranza and U.S. Treasury
Secretary Steven T. Mnuchin Regarding Enactment of the Paycheck
Protection Program Flexibility Act
WASHINGTON –SBA
Administrator Jovita Carranza and U.S. Treasury Secretary Steven T.
Mnuchin issued the following statement today following
the enactment of the Paycheck Protection Program (PPP) Flexibility
Act:
“We want to thank President Trump for his leadership and
commend Leader McConnell, Leader Schumer, Speaker Pelosi, and Leader
McCarthy for working on a bipartisan basis to pass this legislation for
small businesses participating in the Paycheck Protection Program.
“We also want to express our gratitude to
Chairman Rubio, Ranking Member Cardin, Senator
Collins, Congressman Roy, Congressman Phillips, and other
members of Congress who have helped to create and guide
our implementation of this critical program that has provided
over 4.5 million small business loans totaling more than $500
billion to ensure that approximately 50 million hardworking Americans
stay connected to their jobs.
“This bill will provide businesses with more time and flexibility to keep
their employees on the payroll and ensure their continued operations as
we safely reopen our country.
“We look forward to getting the American people back to
work as quickly as possible.”
Upcoming Procedures
SBA, in consultation with Treasury, will promptly issue rules
and guidance, a modified borrower application form, and a
modified loan forgiveness application
implementing these legislative
amendments to the PPP. These modifications will
implement the following important changes:
Extend the covered period for loan forgiveness from eight
weeks after the date of loan disbursement to 24 weeks after the date of
loan disbursement, providing substantially greater flexibility for
borrowers to qualify for loan forgiveness. Borrowers who
have already received PPP loans retain the option to use an
eight-week covered period.
- Lower the requirements
that 75 percent of a borrower’s loan proceeds
must be used for payroll costs and that 75 percent of the
loan forgiveness amount must have been spent on
payroll costs during the 24-week loan
forgiveness covered period to 60 percent for
each of these requirements. If a borrower uses less than 60
percent of the loan amount for payroll costs during
the forgiveness covered
period, the borrower will continue to be eligible for
partial loan forgiveness, subject to at least 60
percent of the loan forgiveness amount having been used
for payroll costs.
- Provide a safe
harbor from reductions in loan forgiveness based on reductions in
full-time equivalent employees for borrowers that are unable to
return to the same level of business
activity the business was operating
at before February 15, 2020, due to compliance with
requirements or guidance issued between March 1, 2020 and
December 31, 2020 by the Secretary of Health and Human
Services, the Director of the Centers for Disease Control and
Prevention, or the Occupational Safety and Health
Administration, related to worker or customer safety
requirements related to COVID–19.
- Provide a safe harbor
from reductions in loan forgiveness based on reductions in
full-time equivalent employees, to provide
protections for borrowers that
are both unable to rehire individuals who were employees
of the borrower on February 15, 2020, and unable to hire
similarly qualified employees for unfilled positions by December 31,
2020.
- Increase to five
years the maturity of PPP loans that are approved by SBA
(based on the date SBA assigns a loan number) on or after June
5, 2020.
- Extend the deferral
period for borrower payments of principal, interest, and
fees on PPP loans to the date that SBA
remits the borrower’s loan forgiveness amount to the
lender (or, if the borrower does not apply for loan
forgiveness, 10 months after the end of
the borrower’s loan forgiveness covered period).
- In addition, the
new rules will confirm that June 30, 2020, remains the
last date on which a PPP loan application can be approved
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