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 & Cordóva, 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) :
|Luis Ortiz Abreu|
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