Hidden Pitfalls of the New PPP Flexibility Act
Heads up! SBA and U.S. Treasury policy changes have been frequent (and frequently unpredictable). The information below may have changed since it posted. For the most up-to-date information, call us at 800-447-8233 or email us at email@example.com.
More Freedom! Less Detail
The new Flexibility Act amends the Paycheck Protection Program (PPP) to give borrowers more freedom in spending loan funds. And it does so while retaining the possibility of full forgiveness. But employers should know the new legislation has a lot of new rules—and lacks important detail.
Guidance from the Small Business Administration and U.S. Treasury could be weeks away. But borrowers need to make healthy and informed business decisions right now.
The discussion below is based on a consensus of legal and financial experts. Note that guidance from the SBA and treasury can change everything.
The prime callout in the initial legislation was the 24-week forgiveness period. This gave borrowers more time to spend their PPP loan, but borrowers may have had to consider the consequences of a 24-week period. This created concern that there was an either/or Covered Period scenario.
However, the SBA created new guidance clarifying the Covered Period, and there is now more flexibility. Click here for more details.
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