Pause & 

Program Updates

To best serve our partners and clients, RPM Payroll has diligently tracked updates surrounding the Paycheck Protection Program (PPP) and have identified the biggest changes and/or updates regarding the following programs. 

RPM Business Recovery Resources

PPP Loan Forgiveness

On July 4, 2020, the Federal government extended the availability of loans under the Paycheck Protection Program (PPP) until August 8, 2020. Previously, the final day to apply for a PPP loan was June 30, 2020. As a reminder, PPP loans are designed to be 100% forgivable as long as the proceeds are spent in accordance with program rules. PPP loans are available based on ten weeks of payroll costs in a specified base period. As of June 30, the fund for PPP had an estimated $130 billion remaining to support forgivable loans.

Also, previously, borrowers had an 8 week period to utilize their PPP loan, now companies can choose to utilize their PPP loan within 8 weeks or a 24-week period. Why does it matter to you?   The ability to be fully forgiven has increased. Companies who are not able to use their forgivable costs within 8 weeks should take advantage of the 24-week covered period.

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Ratio of Forgivable Costs

Companies previously had to spend 75% of their PPP Loan on payroll and 25% on rent, utilities, and mortgage interest in order for loan forgiveness. Now, under the Flexibility Act, the borrower must use at least 60% of the loan for payroll costs and 40% for utilities, rent, and mortgage interest. If a borrower uses less than 60% of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness.  

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RPM Payroll also recommends: ADP Loan Forgiveness Estimator Tool

Flexibility Act

With regards to the Flexibility Act, previously the deadline that employers had to rehire their employees that were laid off between February 15 and April 26, or restore employee wages that were reduced was between February 15 and April 26, it has now been extended from June 30 to December 31, 2020.  

Loan Maturity and Forbearance

The 6-month deferral on repayments has been removed. You do not need to repay the PPP until your forgiveness application has been processed and completed. You have up to 10 months after the end of your covered period to apply for forgiveness. After that time, payments will be required. 

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Payroll Tax Deferral

Previously, if a borrower received forgiveness, payroll taxes would have been immediately due. The Act removes this responsibility. Employer payroll taxes will remain deferred until December 31, 2020. 

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