The Paycheck Protection Program Changes All Dealers Need to Know
Wednesday, June 17, 2020
WASHINGTON, D.C. – June 17, 2020 – On June 5th, President Donald Trump signed the bipartisan Paycheck Protection Flexibility Act of 2020 into law, officially making significant changes to the Paycheck Protection Program. MRAA outlines some of the major changes in our document here.
Notable changes include:
- Loans can be used for 24 weeks now, up from 8 weeks
- 60% of funds must now be used on payroll expenses, down from 75%
- Borrowers can request loan forgiveness AND defer payroll taxes
- Employers have additional exemptions to still have their loans forgiven if they are unable to bring back employees. The timeline to rehire employees is extended from June 30 to December 31, 2020.
The Treasury Department issued essential guidance on the 60% rule for payroll costs, saying that it is not a “cliff.” Instead, if a dealer who received PPP funds does not spend 60% or more on payroll during the 24-week period, then PPP loan forgiveness will be based on whatever amount is spent on payroll.
Additional guidance was released indicating that PPP loan forgiveness applications are being reworked so that borrowers can determine their forgivable amount “in 15 minutes.” We should note that dealers should have their accountants or other financial advisors help review this application to ensure maximum loan forgiveness. You can review the new borrow application here.
There is still $130 billion in PPP funding available until June 30, so if you’ve not received a loan yet there is no better time to look.
For additional information, please contact MRAA government relations manager Adam Fortier-Brown at email@example.com.