On June 16, Tonkon Torp attorneys hosted a roundtable discussion on the Paycheck Protection Program Flexibility Act (Flexibility Act) and how it has changed the terms and timelines for PPP loans. The program was moderated by Jeff Cronn, Co-Chair of the firm’s Business Department, and featured attorneys Drea Schmidt and Ferdie Ruplin. During the program, they addressed concerns frequently raised by borrowers and answered live questions from the audience.
The Flexibility Act extended the covered period for forgivable expenses from eight to 24 weeks, and reduced the percentage of loan proceeds that must be allocated to payroll costs from 75% to 60%. It also extended the safe harbor period for restoring employee headcount to give businesses more time to ramp back up to full employment, and added new loan forgiveness reduction exemptions for FTE reductions made during the covered period of a PPP loan. The attorneys unpacked these changes and provided a number of strategies that borrowers can use to choose an appropriate covered period, maximize forgiveness, and prepare for PPP forgiveness and repayment.
During the live Q&A portion of the program, Jeff, Drea and Ferdie provided further clarification about the Flexibility Act provisions, and responded to scenarios and situations submitted by webinar guests. They also acknowledged that as with every release of additional PPP guidance, new answers come with new questions. They are looking forward to receiving more guidance from the SBA to address more nuanced questions regarding forgiveness.
This was the third webinar that the Business Department has held specifically for PPP issues, and there will be more scheduled for the coming weeks as the PPP loan program continues to evolve. A recording of this webinar is available online. Viewers are encouraged to follow up directly with attorneys to ask questions not addressed during this program. Tonkon Torp has published a COVID-19 Business Resource page that is continually refreshed with news, alerts, and events that address a broad range of corporate topics.