Menu
Blog Banner Image

The Franchise Memorandum

Paycheck Protection Program Continues to Evolve

On June 5, 2020, the President signed the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) (Pub. L. 116–142), which changes key provisions of the Paycheck Protection Program (PPP), including provisions relating to the maturity of PPP loans, the deferral of PPP loan payments, and the forgiveness of PPP loans. Section 3(d) of the Flexibility Act provides that the amendments relating to PPP loan forgiveness and extension of the deferral period for PPP loans shall be effective as if included in the CARES Act, which means that they are retroactive to March 27, 2020.

In announcing its “Third Interim Final Rule,” interpreting the Flexibility Act, the Department of Treasury stated that the Small Business Administration (SBA) was decreasing from 75% to 60% the portion of loan proceeds that must be used for payroll costs for loans to be 100% forgiven. The Rule also clarifies that the maturity date for PPP loans may be extended by agreement of the borrower and lender beyond the 5-year period specified in the CARES Act. The full Forgiveness Application may be found here.

On June 17, the Department of Treasury and SBA published “EZ and Revised Full Forgiveness Applications for the Paycheck Protection Program (PPP)” for loans issued pursuant to the CARES Act. Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program.

On July 6, SBA published a report summarizing lending under the PPP program, stating that 4,885,388 loans, worth $521,483,817,756 had been made by 5461 lenders as of June 30. As of that date, $131,914,229,876 of PPP funding remained available.

Email LinkedIn Twitter Facebook

The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

To subscribe to monthly emails for The Franchise Memorandum, please click here

Topics

Archives

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Blog Authors