Late last week, the United States Small Business Administration (SBA) released yet another round of guidance updates regarding the Paycheck Protection Program (PPP). The areas covered by this latest release are maturity dates and loan amounts. A recent article from the Journal of Accountancy offers a brief overview of the guidance update.
The additional guidance was released in the form of new and updated PPP FAQ questions on the SBA website. Here are details of the changes made to the FAQ page:
FAQ 49 was added to the list. It clarifies that PPP loans that were assigned an SBA loan number on June 5, 2020 and later have a five-year maturity window. PPP loans assigned an SBA loan number prior to June 5, 2020 maintain the two-year maturity window established by the CARES Act. However, the borrower and lender may work together to extend the loan term to five years.
FAQ 10 was updated to reflect the new maximum loan amounts for self-employed individuals whose businesses were in operation on February 15, 2020 but not in operation between February 15, 2019 and June 30, 2019. For these individuals, the maximum PPP loan amount is calculated by multiplying their average monthly payroll for January and February 2020 by 2.5. If the individual received an Economic Injury Disaster Loan (EIDL) between January 31, 2020 and April 3, 2020, they should add the outstanding amount that will be refinanced by the PPP loan to their calculation.
FAQs 1, 2, and 4-7 were updated to reflect that the Paycheck Protection Program Flexibility Act of 2020 extended the covered period from eight weeks to 24 weeks.