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The original PPP program gave businesses 2.5 months of payroll as a loan which would be forgiven if you spent the money on payroll and other allowable costs over the 8 week period after you got the loan.

Yesterday (June 4) congress finalized and passed HR 7010 which changes the PPP program retroactive to the original law date.  Here are some key changes and how they will affect your business:

  1. The business now has 24 weeks to spend the money instead of 8 weeks.  That should basically do away with the chance any business could have to repay any of the loan.
  2. Only 60% of the funds now have to be spent on payroll instead of 75%.  The remaining part of the loan can still only be spent on rent, interest, and utilities.
  3. The last date any business can spend PPP money now goes from June 30 to December 31.
  4. You now have 10 months after the 24 week period to apply for forgiveness.
  5. The reduction in the forgiveness based on a reduction in number of employees has for all practical purposes gone away. You simply have to document an inability to return to the same level of business activity.

We had been working with many of you to determine if you wanted to issue bonuses and use the additional payroll cost to reduce any potential loan repayment.  You can still consider bonuses to reward those who have helped your business during this difficult time but for now it appears those bonuses will not be needed to minimize PPP payback.

We believe there will also be a simplified forgiveness calculation form coming out based on all these changes so we suggest waiting to try and file for forgiveness until Treasury issues revised guidance based on the changes.


All I can say at this point is you just have to love Government!  They can make the rules and change them any time they want.  Everyone has spent a lot of time tracking this program and it looks like much of that may be wasted.  However, the fact remains every business got funds from PPP and was able to help their employees and keep the economy on track as a result of this program.  This started as a simple program to help keep the economy on track and it looks like it is getting back to a fairly simple program.

Bert Doerhoff CPA