Congress is Considering Major Improvements to the PPP Loan Program

Sunday, October 18, 2020.   5:00 PM

There continues to be considerable confusion in Washington about the prospects for passage of the PPP extension and expansion and simplification of forgiveness.  Based on the broad support for PPP in the House, Senate, and White House, we are anticipating that an expanded PPP will pass, probably in or close to the form described below, whether as part of a general stimulus bill or stand-alone.   

As it stands at this moment, the authority for SBA to approve a PPP loan guarantee ended on August 8.  The pandemic stimulus bill passed on Oct. 1 by the House contains several important provisions for the PPP loan program, including:

  1. Extends the deadline for applying for an initial PPP loan until December 31, 2020.
  2. Creates a new "second" PPP loan in the amount of the first loan.
  3. Dramatically simplifies the forgiveness process for loans under $150,000

More details of these three elements of the House bill are provided below.  

The major provisions in the House bill include:

  • Deadline for initial PPP application approval by SBA extended from August 8 until the end of 2020.
  • Forgiveness for borrowers under $150,000 will be "streamlined" (a single form and no documents delivered).  Above $150,000 will be under existing requirements.  
  • Loan forgiveness expenses will be expanded to include certain supplier costs, operating and other expenses.
  • Second round of PPP loans for businesses  that can demonstrate a 25% drop in gross revenue in a quarter in 2020 compared with the same quarter in 2019.  These loans will be calculated similarly to the last round, but will have a smaller cap.