Home / What the new Paycheck Protection Program Flexibility Act means for you
The legislation signed last week is good news for the restaurant industry, fixing some of the problems with the Paycheck Protection Program.
Thanks in part to efforts by the National Restaurant Association, small businesses, especially restaurants, have more incentives to apply for the Paycheck Protection Program enacted in April in response to the coronavirus crisis.
The deadline to apply for a PPP loan is June 30.
The Paycheck Protection Program Flexibility Act, a House-initiated reform bill passed by the Senate and signed into law by President Trump on June 5, fixes the problems in the PPP that prevented many restaurants from applying.
The changes to the PPP make it possible for more restaurants to take advantage of the program’s loans, gives greater flexibility to those who have already applied in how and when they use the loans, and makes it easier for all recipients to meet the requirements for loan forgiveness. Here are highlights of the changes and what they mean for you.
New PPP borrowers will have a 24-week covered period from the date of the loan, or until Dec. 31, 2020, whichever comes first. This extension and flexibility in which time period you use should make it easier for your loan to qualify for full, or almost full, forgiveness.
Many restaurateurs felt bound by the eight-week window because many of them were not even open to full employment capacity and doubted they would be in eight weeks when the first PPP was passed in April.
1. You’re unable to rehire the employees who were on staff before February 15;
2. You’re unable to hire employees with similar qualifications for unfilled positions by then; or
3. Your restaurant is unable to return to the previous level of business before February 15, 2020, due to compliance with any COVID-19-related government restrictions still in place.
The Small Business Administration (SBA) is expected to release a set of FAQs to clarify the new rules in the next week.
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