Paycheck Protection Program Act Updates

Since our last update describing changes made to the Paycheck Protection Program (the “PPP”) by the Paycheck Protection Program Flexibility Act of 2020 (the “PPPFA”), which was signed into law by President Trump on June 5, 2020, the U.S. Small Business Administration (the “SBA”) has published numerous revisions to prior interim final rules (“IFRs”) it had released to govern implementation of the PPP with respect to eligibility requirements, disbursement, loan forgiveness and loan review to conform to the PPPFA and clarify certain requirements set forth therein.  Generally, the PPPFA provides PPP loan borrowers additional time to incur costs that count towards PPP loan forgiveness, reduces the portion of such costs that must be payroll costs, provides additional exemptions from the CARES Act’s (as defined below) loan forgiveness reduction provisions and extends the deadline to rehire workers in order to remain qualified for full forgiveness.  The PPPFA Act also allows businesses that receive loan forgiveness to defer payroll taxes, extends (for new loans), and permits the extension (for existing loans) of, the PPP loan maturity date and extends the PPP loan payment deferral period.  The IFR revisions and guidance implement these changes to the IFRs, and also introduce new rules addressing payroll costs that may be included on a PPP loan application or loan forgiveness application submitted by certain boat owners or operators that have hired one or more crewmembers who are regarded as independent contractors or otherwise self-employed that were not previously reflected in the PPP statutes and guidance.

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