New Flexibility on PPP Loans

By: Angel Berberena, Esq.

June 5, 2020

On June 5, 2020, President Donald Trump signed into law the Paycheck Protection Program Flexibility Act of 2020 ("PPPFA"). The PPPFA modifies provisions related to the use and forgiveness of loans under the Paycheck Protection Program implemented in response to COVID-19.

Specifically, the PPPFA:

  • Extends the original requirement that the business use the loan disbursements no later than 8 weeks from the loan disbursement date up to 24 weeks or December 31, 2020, whichever comes earlier.
  • Modifies the amount of the loan that needs to be used for payroll and for other eligible uses. Borrowers now have to use up to 60% (down from 75%) of the loan amount for payroll costs and may use up to 40% (up from 25%) of such amount for the payment of interest of any coverage mortgage obligations, any payment on any covered rent obligation, and any covered utility payment.
  • Employers now have until December 31 (previously June 30) to rehire certain laid-off employees without reduction in the loan forgiveness. Additional exceptions were created when the borrower cannot find employees due to risks and inability to social distance and when the borrower cannot restore operations due to social distancing, sanitation requirements or customer safety needs.
  • The maturity date for certain loans was extended to five (5) years (previously 2 years).

Employers should now have more flexibility regarding the rehiring and safe reopening of operations while being able to take full advantage of the disbursement and forgiveness provisions of the PPP loans.

Goldman Antonetti & Córdova, LLC stands ready to assist you and your business to adjust to Puerto Rico's regulatory and legal changes. If you need further assistance in this area, please contact any of the following members of our Firm (note that during this emergency, it will be easier for you to communicate with us through electronic mail, as provided below) :

Angel Berberena 787.759.4143
Howard Pravda 787.759.4101
Luis Antonetti 787.759-4111
Vicente Antonetti 787.759.4112
Romel Meléndez 787.759.4115
Luis Ortiz Abreu 787.759.4110
Gabriel Quintero 787.759.4130
Javier Vazquez 787.759.4113

Disclaimer:

Although the information included in this document may concern legal issues, it is not a legal opinion or professional advice and clients shall not use it as such. We assume no responsibility or liability of any kind for any information contained herein, and we expressly disclaim all liability for any claim for damages arising from the use, reference to, or reliance on, such information. If legal or other expert assistance is required, the services of a competent professional should be sought.

Goldman Antonetti & Córdova, LLC | 787-759-8000 | www.gaclaw.com