As of June 5th 2020…

The PPP rules have changed with the recent law passed by Congress.  There is already a crap load of info out there about it.  So I just want to give you the meat and summary of the changes.  My notes here assume you are somewhat already familiar with PPP and the previous rules.

The payment terms have been changed from 2 years to 5 years.  Any new PPP loans automatically have the 5 year term.  If you have an existing PPP loan, you need to apply for the extended terms with the bank that gave you the loan.

The first payment was deferred for 6 months.  Now it is either 6 months or until the date the lender receives the forgiveness amount.  So this means that if it takes you 10 months to get a forgiveness amount and the full amount wasn’t forgiven, your first payment would be deferred for 10 months instead of 6 months.

The window to use the funds has been extended from 8 weeks to 24 weeks from the loan deposit date OR December 31, 2020 whichever is earlier.  So if you get your PPP loan sometime in July or after, you would have until December 31, 2020 to use all the funds to earn forgiveness.  If you got your loan before then July, then you’ll have the full 24 weeks to use the funds.

Full time equivalent of employees has to be matched to receive full forgiveness by December 31, 2020.  This used to be June 30^th.  There are exceptions to this rule if you extend and offer to employees to come back and they turn you down.  (You are legally required to report those employees to the unemployment office by the way.)  This was a much bigger deal when the window was only 8 weeks.  Now that you have 24 weeks, your gym will likely be open again before that time passes which means your employees have less of a reason to stay on unemployment because they aren’t certain about future employment.

Instead of needing to spend at least 75% of the loan amount on payroll in order to get full forgiveness, it is now 60%.  But this change came with a massive difference. The language has changed to say you MUST spend at least 60% on payroll.  If you don’t, the loan will not be forgiven at all.  Zero of the loan would be forgiven.  So if you got a 10k PPP loan, you have to spend at least 6k on payroll.  If you spend $5,900 on payroll, none of the loan would be forgiven.

As you all know, we will do our best to answer any questions you have.