What the new PPP loan rules could mean for you

Have you applied for and received a Paycheck Protection Program (PPP) loan only to be confused about how it can be spent? Many companies are worried about how they can possibly spend the money on payroll when their stores were forced to close and operations have stopped altogether. Others can barely make rent and their payroll numbers are lower as their business is slow.


The House passed a bill yesterday that will change the requirements on how the money must be spent and the timeline for those expenses. If it passes in the Senate next week here is what those changes could mean for you:


  • Payroll Expenses - currently 75% of the funds must be spent on payroll, that will be reduced to 60%. The remaining 40% is to be used for mortgage interest, rent and utilities.

  • Payroll Taxes - this new bill will allow companies that receive loan forgiveness to defer paying payroll taxes.

  • Loan Forgiveness - currently the amount of the loan that is forgiven is based on the borrower's payroll expenses over an 8-week period from the disbursement date of the loan. This will be extended to 24-weeks.

  • Loan Repayment - originally these loans would mature or be due in 2-years. This date will be extended. The exact timeline is yet to be determined.

  • Rehiring Requirements - borrowers originally had until June 30, 2020 to rehire workers but that date will be extended. The exact date is yet to be determined.

Have you received a PPP loan? What was the process like and how are you spending the money? How will this new bill help you?

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