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PPP Loan Forgiveness August Update

PPP Loan Recent Changes, Your Application & What You Should Focus on

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5 Recent Changes

Changes to the law reduced the amount of loan needed to be spent on payroll from 75% to 60%. This increases the amount of funds available for your other expenses from 25% to 40%!

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Business owners now have increased flexibility. Instead of having to spend the money in just eight-weeks after the funds were received, you'll now have twenty-four-weeks.

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If you had to furlough or layoff employees, your deadline to rehire them in order for their salaries to count towards forgiveness has been pushed back from June 20, 2020 to December 31, 2020.   

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Even the rehire requirements were eased, by including additional exception rules. Prior, only employees who rejected an offer to be rehired could be exempt. Now,

  • If you're unable to rehire an individual who was an employee (your employee refuses to return for whatever reason) on or before February 15, 2020,
  • You're able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020 or,
  • You're able to demonstrate an inability to return to the same level of business activity as you were operating at prior to February 15, 2020.

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And, in the event that your loan or portion of them isn't forgiven - your repayment term has been extended from 2 years to 5 years.

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Why it's Recommended to Not Yet File Your Application

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As your trusted advisor, we continue to monitor this situation and will notify you of important changes. Most importantly, we want to share why it is recommended to not yet file your PPP Loan Forgiveness Application.

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  1. There may be additional extensions forthcoming from the SBA and Treasury.
    • ?In the event we filed your application for forgiveness prior to any of these additional program modifications (in other words, if we filed your application right now) - you might end up missing out.
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  2. The rules and laws surrounding the PPP Loan, since its initial adoption, continue to change. 
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  3. Recent discussion indicates that if your PPP Loan was $150,000 or less, you may not be required to apply for forgiveness or a one page form may be used. There has also been some discussion that this dollar amount may change.
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  4. Most banks are not ready to accept loan forgiveness applications and are recommending to wait to file. 
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  5. Our best recommendation is to wait until the full 24 weeks have passed since you received your PPP Loan, before your Application for Forgiveness is filed. We foresee the correct time to file will be this Fall to Winter, which is dependent upon further guidance. We have requested the engagement letter prior to the time to file so that:
  • Our team can help determine the correct time you should apply,
  • We can help you track spending and gather information needed; and,
  • Ensure you'll be prepared.


With that being said, we will continue to monitor this situation as well as provide you with updates on the status and changes to the process. 

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What You Need to be Doing Right Now

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Use the money for eligible expenses.

Keep your employee headcount
up

Don’t reduce an employee’s wages by more than 25%.

Document everything - especially where you're spending the money. Having accurate invoices and receipts will help us prove which expenses should be forgiven.



Allow RBSK to file your loan forgiveness application at the appropriate time based on your business' needs

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We have a Tracking Tool available for our clients that helps you with loan-related record keeping. If you have not yet received this from us, please click here to request yours.

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For more information visit our COVID-19 Guidance Center.


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We are committed to serving clients with care, and we are confident we are taking precautionary measures to promote the health and safety of our staff and clients. We know that this is a stressful time for everyone, and we hope that you, your family and our community stay safe.

Please call us at 800-676-7567 if you have any questions

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