With the application deadline for the PPP loan behind us, borrowers are now tasked with maximizing forgiveness in most cases, as well as applying for forgiveness.  While the initial rules were somewhat rigid, the Paycheck Protection Program Flexibility Act of 2020, signed into law on June 5, 2020, makes forgiveness much easier.

Changes to PPP loan forgiveness:

  • The covered period extends to 24 weeks from 8 weeks, although utilizing the 8-week period is still allowed
  • Borrowers are required to apply for forgiveness within 10 months following the covered period
  • The rehire exemption date was extended to December 31, 2020 from June 30, 2020 for restoring their workforce and wage levels to pre-pandemic levels
  • If Full-Time Equivalents (FTEs) are not restored by December 31, 2020, loan forgiveness may not be reduced if the borrower:
    • is unable to rehire an individual that was an employee on or before February 15, 2020 AND
    • is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020, OR
    • is able to demonstrate the inability to return to the same level of business activity at which the business was operating prior to February 15, 2020, due to compliance requirements or guidance issued by certain federal organizations.
  • Rather than requiring 75% of the PPP funds be used for payroll costs, borrowers only need meet the 60% threshold, in order to be forgivable  
  • Borrowers are now able to defer employer payroll taxes, as well as be eligible for PPP loan forgiveness
  • For PPP loans that are not forgiven, the term has been extended to 5 years for loans made after the Act was passed, from 2 years, with an interest rate of 1%; loans made prior to the Act may be extended 5 years

The portion of the loan that is forgiven remains excludable from taxable income, while the covered expenses are not deductible (Notice 2020-32).  There is a possibility that this might change.

PPP Loan Forgiveness Application Revised June 16, 2020: 


Because the PPP program is constantly changing, we encourage you to follow us on social media and to give us a call at (503) 227-0581, so that we can assist you with any questions.