On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, which established, in relevant part, the Paycheck Protection Program (PPP), a loan program that offers eligible borrowers the potential for loan forgiveness. For more information on the PPP and other CARES Act lending programs, click here, and for information about applying for PPP loans, click here.
Paycheck Protection Program (PPP) Flexibility Act of 2020
In an effort to make the terms of PPP loans more flexible for borrowers, Congress passed certain changes to the PPP in the Paycheck Protection Program Flexibility Act of 2020, which President Trump signed into law on June 5, 2020 (the Flexibility Act).
The Flexibility Act makes certain changes to the original CARES Act regarding the administration of the PPP and the terms of PPP loans. Please take note of the following changes—for your reference, we note the original terms from the CARES Act in the first column, and the new, amended terms from the Flexibility Act in the second column.
If you have not yet applied for a PPP loan or have not yet received funding, you do not have to do anything regarding these changes other than take note of them. If you have already received PPP loan funding, we encourage you to consult with your lender, financial advisor, and legal counsel to determine how these changes may impact your original PPP loan application and your PPP loan forgiveness application.
Loan Forgiveness under the PPP
The U.S. Small Business Administration (SBA) is in charge of determining loan forgiveness under the PPP, and the SBA has issued an application and instructions for loan forgiveness, which you can read more about here. Given the changes to the PPP by the Flexibility Act, we expect guidance and additional changes to the forgiveness application over the coming weeks.