PPP Loan – Major Update
PPP Loan Update
Today is June 11, 2020. There is a major PPP loan update that means more time and more flexibility for businesses. Take a listen. Subscribe to my newsletter.
Here’s a summary of important PPP Loan changes. Business Impact NW is a great resource for Washington Businesses.
✔️ Extended “covered period” (loan use period) for loan forgiveness from eight weeks after the date of loan origination to 24 weeks after the date of loan origination, or Dec. 31st, 2020.
- Borrowers who have already received PPP loans retain the option to use an eight-week “covered period” (loan use period).
✔️ Lowered spending requirement on payroll expenses from 75% to 60%. If less than 60%, borrower is still eligible for partial forgiveness.
✔️ Borrowers won’t have to make employer payroll tax payments through the end of 2020.
✔️ Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30
✔️ PPP Loans issued before June 5, 2020 will still be subject to a two-year payback period, although banks are allowed to extend that to five years if they so desire. PPP loans approved after June 5, 2020 will have a five-year payback period. The period applicable to your loan will be based upon the date the recipient received a loan number from the SBA.
- BIN will be accepting PPP Loan applications through June 28, 2020. Please submit your application and upload supporting documents via this link: https://businessimpactnw.org/loan/ppp/
✔️ Payment of PPP loan principal, interest and fees are deferred until forgiveness is remitted to the lender, only if the borrower applies for forgiveness within 10 months after the last day of the covered period.
- Covid-19 resources
- Business Impact NW – https://businessimpactnw.org/resources/
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My website. My most recent Financial Side of Life podcast.
Facebook Live PPP Loan Updates 6-11-2020[00:00:00] Hey everybody. Good. Thursday afternoon. It’s Angie coming to you from West Pasco in Washington, Southeastern Washington, to be exact. And I’m just pulling up something here on my computer. I think I had an update, so my computer was taking his time getting, going here, but as I kind of cue up, I wanted to talk a little bit today about the, updates. [00:00:27] To the PPP loan, which is the personal protection, loan paycheck protection program loan that is available to small business, small businesses, small business owners to kind of help combat. what’s been going on with businesses. With the advent and the start of the stay at home stuff. the pandemic and the disruption in general to businesses. [00:00:52] So, I received an email recently that kind of talked a little bit about some of the, the changes, that happened [00:01:00] here in the last few days that are beneficial to small businesses. So if you are a small business owner or you have friends who are small business owners and they don’t know about this, be sure to let them know, I know a few weeks ago I was talking to a small business owner and they had received a PPP loan, but they were very reluctant to spend any of that money because they felt like, the, the rules or the restrictions were just so strict that they were afraid it was not going to be forgiven. [00:01:28] And then they’d be on the hook for this $40,000 loan. And, meanwhile their business was suffering and they weren’t sure they were going to be in business and be able to pay off that kind of alone. So, this change is really interesting. I’m, I’m glad to see that it took place. it’s called the paycheck protection, flexibility act, and I guess it was, brought into law around the fifth or so. [00:01:54] So, I guess that would be last week sometime. And there’s a few things that are highlights that I just kind of [00:02:00] wanted to share with you. I haven’t dug into a lot of the details, so I’m gonna just go real light here today. But. At the very minimum realize there, there have been changes to the PPP loan, again for small businesses and for, people who have applied for some assistance and, and have received assistance. [00:02:22]I also want to make sure that you know, that there is a deadline. And so today is the 10th, 11th. It’s the 11th. June 11th. And there is a June 30th application deadline for the PPP loan, which was not changed. So that’s still in place, something for you to pay attention to if you have not applied. So a couple of highlights, let me just see here. [00:02:53] So the cupboard period, which they describe as the loan use period has [00:03:00] been extended from. eight weeks. Okay. Two 24 weeks after the origination of the loan or until December 30, first of 2020. So that’s an important, a very important, I would say as one of the key changes that I would have been looking for is that there’s more time to spend this money. [00:03:20] Eight weeks was like, sheesh, you know, everybody’s frozen. What are you going to do in eight weeks? Not a whole lot is changing very quickly these days. So, Eight weeks has been extended to 24 weeks. again, thanks for jumping on the call. I’m just talking a little bit about some of the updates on the PPP. [00:03:38] There was the paycheck protection program, flexibility act. That was just passed last week. And so I’m just going over some of the highlights that apply to that particular program into those loan, that loan money. so it was extended from eight weeks until 24 weeks. And, after the origination of the loan or until [00:04:00] December 31st, 2020, then. [00:04:03] There was a lowered spending requirement on the payroll expenses. It went from 75% down to 60. And so if less than 60, it says borrowers are still eligible for partial forgiveness. And so I know again, that was one of the key things that my business owner I was speaking to was worried about because they were having a hard time attracting back. [00:04:26] Some of that. some of those employees because, unemployment was paying them more than they were getting at their job. So they weren’t so entice to come back to work for less money. okay. So borrowers won’t have to make employer payroll tax payments through the end of 2020. So that’s another plus borrowers are not having to make those payroll tax payments this year. [00:04:50]another key area borrowers can use the 24 week period to restore their workforce levels. So get those employees back again. If you’re in the [00:05:00] restaurant business and you’re operating at 25 or 50% of normal capacity, I’m not sure how you’re going to get all your employees back to full force, but, you know, working toward that, and that has to be done by December 31st. [00:05:14] Which is a change from the previous deadline of June 30th. Okay. And then one more item here, loans that were issued before June 5th are still subject to a two year payback period. And banks are allowed to extend that to five years if they so desire. So that is an extension as well from two years to five years, which without a doubt is going to help people pay back because those monthly payments are going to be smaller. [00:05:42] And give them more time to re rebound from this time period as well. So those are just a few of the highlights I wanted to make sure you were familiar with. There are a couple of source places you can go to. I will put links [00:06:00] into the comments area on this live, but it’s suffice it. It’s a home.treasury.gov forward slash news. [00:06:09] Press releases as well as the actual bill. You can see on the congress.gov site. And it’s a bill seven, 10, I believe is what it is. So, just wanted to give you a little bit of update there. Hello, drop, drop a hello in the comments I’d love to hear from you. Who’s on the call. What’s on your mind. This is a recent change. [00:06:31] I was just talking about the PPP flexibility act, which is, modifying some of the stringent restrictions on the PPP loan to small businesses. And, there’s a few resources you can go to, to find out more details. I, got an email just today from somewhere in Washington state that sent out some information to me. [00:06:53] So I was reading about that. you can look on Investopedia. That’s a pretty good resource for a lot of different financial related [00:07:00] information Investopedia. And it’s the PPP flexibility act of 2020. you can also firstname.lastname@example.org for the original source information there as well. [00:07:14] So as always, you know, I’ve, I’ve talked to my. A couple of accountants and was curious to see how busy they were and what’s going on. And they said, they’re very busy because they’re answering questions on this very topic, you know, how do they, how to businesses deal with the loans that are coming in, they’ve applied for stuff. [00:07:35] You know, they, they need these loans to kind of keep their doors open and keep going. But then there’s a lot of questions behind, you know, how do I. How do I navigate this so that I don’t end up having to repay it? I want it to be forgiven. What are the steps I got to do to make sure I ensure that it’s it’s forgiven at the end? [00:07:55]so I would always encourage you to reach out to someone like me. I have a wide network of [00:08:00] other professionals who are tax professionals, CPAs, enrolled agents, and so on, and they can answer questions. I can do my best to get answers for you as well. So as always just reach out to me. it’s Thursday. [00:08:13] So tomorrow is Friday. I like to keep this offer open to people. This is a, a really tough time for a lot of families. A lot of things on people’s mind. I have two, spots for 20 minute strategy sessions on Fridays. I set those aside for people. So I really want to offer that. And if there’s anything that I can do, let’s talk through it and let’s spend 20 minutes and laser focus on this very particular topic. [00:08:39] That’s important to you. See what kind of resolution we can come up with. What kind of brainstorming ideas we can do that will help you through this time? I know not everyone’s a business owner, so today’s topic doesn’t apply to everyone, but without a doubt, we all have friends and family who have, businesses. [00:08:57] So to be familiar with some of the [00:09:00] programs out there, Is really important to help us through this time to help us succeed and come out of this pandemic and economic situation that we’re in better than we were going in. So. feel free to direct message me. You can do that right here on Facebook. [00:09:15] Direct message me and just say, yes, I’d like to set up time tomorrow and talk for 20 minutes. I’m here. That’s what I love to do. And that’s how I help people. So I want to make sure to let you know that that’s always available. Okay, everyone. It is a Thursday and I will be back here on Tuesday. Tuesdays are 1135 and Thursdays are 1235. [00:09:39] So in the meantime, if anything comes up, shout out to me, drop me a note. Let me know what’s on your mind. If there’s anything specific that I can speak to for you. I’m happy to do that. So, and then don’t forget about Friday 20 minute strategy sessions as well. Reach out to me and let’s set something up. [00:09:57] Have a great weekend. We will see you soon. Bye. [00:10:00]
Angie founded Avea Financial Planning and is a fee-only advisor helping people retiring in 1-2 years, particularly PNNL employees, with tax-smart retirement planning, investments & fiduciary financial advice so they can be more confident and live life on their own terms.