PPP Flexibility Act Passed

Payroll Protection Program Flexibility Act

Payroll Protection Program (PPP) Flexibility Act was signed into law last week. 

Highlights include:

• Extending the expense forgiveness period from eight weeks to twenty-four weeks
• Reducing the 75 percent payroll ratio requirement
• Eliminating 2-year loan repayment restrictions for future borrowers
• Allowing payroll tax deferment for PPP recipients
• Extending the June 30 rehiring deadline
  

We received the following information from the SBA this morning and will share their rules and guidance with you as soon as we can.

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SBA Announcement on Upcoming Procedures as a result of the PPP Flexibility Act

SBA, in consultation with Treasury, will promptly issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing these legislative amendments to the PPP. These modifications will implement the following important changes:

• Extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
  
  
• Lower the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs and that 75 percent of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
  
  
• Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID–19.
  
  
• Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
  
  
• Increase to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
  
  
• Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
  
  

In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.

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Gov. Little to Offer Back-to-Work Cash Bonuses

Many nonprofits had reported difficulty in getting employees back to work after being laid off due to the additional $600 unemployment benefit that the CARES Act provided. We have been sharing this information with our state leadership and are pleased to share this news from last week. Nonprofits and small businesses both had the same challenge and our state is working to address it:

Recently, Governor Brad Little announced his plan to offer up to $1,500 cash to Idahoans who return to work.

More than 60-percent of Americans who are out of work due to the coronavirus pandemic earn more with the enhanced unemployment benefits than their normal wages. The enhanced benefits are set to expire next month, making it even more important to get Idahoans back to work.

“A strong economic rebound cannot occur without workers returning to a job, and the new Return to Work cash bonuses incentivize our workforce to get back to work safely. Like other states, Idaho went from record employment to record unemployment levels in a matter of weeks. Our hearts go out to those who lost jobs or income due to the global pandemic,” Governor Little said.

The executive committee of the Idaho Workforce Development Council will discuss the plan next week. Under Governor Little’s plan, up to $100 million in federal relief funds will be made available to Idaho workers who are eligible for unemployment benefits during the coronavirus pandemic.

Governor Little’s plan includes one-time cash bonuses of $1,500 for full-time work and $750 for part-time work and will be provided to the worker after return to the workplace.

The funds will be available on a first-come, first-served basis for qualified applicants.

Governor Little will work with the Idaho Workforce Development Council and his Coronavirus Financial Advisory Committee to finalize the plan and eligibility requirements. More information on eligibility and how to apply for a Return to Work cash bonus are expected to be available by June 15 at Rebound.Idaho.Gov.

Idaho was one of the last states with a confirmed coronavirus case and one of the first with a concrete plan in place to open the economy responsibly and safely in stages. Ninety percent of businesses were able to open their doors on May 1, and today nearly all businesses are able to open.

NOTE: Cash bonuses are available to anyone who filed a UI claim since March 1 – even those who have already returned to a job since then. It is first come first served.