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Paycheck Protection Program (PPP)


Paycheck Protection Program LawFormer President Donald Trump signed the Paycheck Protection Program Flexibility Act into law on June 5th, 2020.

Under the law, borrowers enjoy more flexibility regarding how and when they can spend money from loans without sacrificing their eligibility for total and complete forgiveness. More specifically, the law relieves businesses in financial distress and at risk of laying off employees. This was mainly in response to the economic conditions caused by the COVID-19 pandemic and an attempt to prevent mass unemployment.

Unfortunately, many borrowers and lenders of these loans have encountered several issues. Some include qualifying for loan forgiveness, responding to fraud investigations, and defending against potential class action liability.

The PPPFA was reinstated in January 2021. This allowed businesses that had previously taken a loan to obtain another loan and businesses that had not taken a loan before to apply for one.

Terms Of The Law

The law that preceded the Paycheck Protection Program Flexibility Act, the Coronavirus Aid, Relief, and Economic Security Act, required borrowers to spend funds they received from loans within eight weeks. The Paycheck Protection Program Flexibility Act extended this to twenty-four weeks. In addition, under the Coronavirus Aid, Relief, and Economic Security Act, borrowers were required to spend 75% of forgiven amounts on the payroll. This changed to 60% with the Flexibility Act. The other 40% could be applied to mortgage interest, utilities, or rent.

The repayment period for PPP loans has since been extended from two to five years. There is a 1% interest rate. As a result, borrowers now have more time to pay off the unforgiven portion of their loan.

Additionally, the payment deferment period, which includes principal, interest, and fees, has been extended from six months after the covered period ends to when the SBA sends the borrower’s loan forgiveness amount to the lender. If the borrower does not apply for forgiveness, the deferral period will last until ten months after the end of the covered period, as per guidance issued by the SBA on June 8th, 2020.

Under the PPP Flexibility Act of 2020, businesses that have received PPP loans can also delay paying their payroll taxes, which was not permitted under the original CARES Act.

How A Paycheck Protection Program Lawyer Can Help

There are several more terms to this law that can be incredibly involved. Understanding them takes time, but a Paycheck Protection Program Lawyer has gone through the law, so you do not have to. Combined with their experience, they can help you understand how your situation is affected by these laws and guide you in the direction best for you and your business.

More Information

The MacNeil Firm Ltd. prides itself on its knowledge of the law and years of experience winning for clients in court. Our PPP fraud attorneys can protect you if wrongly accused of PPP fraud, and our federal criminal defense lawyers can do the same for accusations of other white-collar crimes pertaining to the Paycheck Protection Program. Call us today to learn more.

Donald N. Macneil, Esq.

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