On June 5, 2020, upon the passing of both the House and Senate and the signing of the President, it was approved that the Paycheck Protection Program Act of 2020 (“PPP”) be changed to offer more flexibility and relief for its recipients. Here are some of the significant changes, which will impact your church if you received these funds.
Covered period extended – Originally, the PPP funding was to cover 8 weeks upon receipt of the loan. The covered period has now been extended to 24 weeks while remaining eligible for forgiveness.
Non-payroll portion increased – Originally, the PPP funding was to be used on both payroll and non-payroll expenses during the covered period in a ratio of 75% to 25%, respectively. The non-payroll portion has now been raised to 40%, requiring only 60% to be used on payroll.
Loan term defined – Should there be a remaining balance of funds unused after the 24-week window from the date of receipt, the remaining balance will be established as a loan with a minimum maturity of 5 years.
Please make sure you contact your loan provider in order to apply for forgiveness of the funds used on payroll and non-payroll expenses as required by the PPP within the covered period. If forgiveness applications are not submitted in a timely manner, the funding received may become a loan, and you would need to check with your loan provider for the full scope of loan terms.
Should you have any questions or concerns, please reach out to Kathy Mitchell via email at kathy.mitchell@inumc.org.