Answer:
Here is a summary of the notable changes made by the newest bill passed by Congress:
- The Minimum Maturity Date for new loans for amounts not forgiven is now five years.
- References to June 30, 2020, have been changed to December 31, 2020 – meaning that the timeline for restoring FTE levels is now extended to year end.
- The borrower may elect a 24-week covered period. However, the 8-week covered period is still available.
- There is a new exception based on employee availability: if a borrower is able to demonstrate either of the circumstances below, then they will not have their forgiveness amount reduced for a reduction in employees.
- Inability to rehire individuals who were employees on Feb. 15, 2020, and an inability to hire similarly qualified employees on or before 12/31/2020; OR
- Inability to return to the same level of business activity due to government orders.
- Reduction of the requirement to use payroll costs for forgiveness – from 75% to 60%. 40% may be used on non-payroll costs.
- Payments may be deferred until the date on which the amount of forgiveness is remitted to the lender. If application for forgiveness is not made within 10 months, then the borrower must start making payments.
Unfortunately, many of these changes are not extremely helpful for borrowers that have been operating under the assumption of an 8-week covered period and have been able to spend their funds.
Finally, no, the new changes and extended covered period do not allow a borrower to receive additional funds. Loan amounts are still based on 2.5x the borrower’s average monthly payroll costs.
