On June 3, 2020, Congress passed the Paycheck Protection Program Flexibility Act of 2020 (PPPFA) that modifies the Paycheck Protection Program (PPP) that was put in place as part of the Coronavirus Aid, Relief and Security (CARES) Act. The PPP is a potentially forgivable loan administered by the Small Business Administration (SBA). This latest legislation changes some of the terms and requirements that will lead to loan forgiveness as we outlined in our recent article.
The Paycheck Protection Program (PPP) is a loan from the bank that will have to be repaid by the practice with interest unless all or a portion of the loan is forgiven through meeting certain requirements. Practices with a PPP loan need to be proactive and put themselves in the best possible position for maximum loan forgiveness. The window of opportunity for forgiveness closes 8 weeks (56 days) from the date the funds are received. Determine this outside date first, and have it burned in the minds of accountants and bookkeepers who provide service to your practice.
The latest legislation designed to assist businesses during the COVID-19 public health emergency is known as the “Paycheck Protection Program and Health Care Enhancement Act”, signed into law on April 24, 2020. It provides $484 billion to supplement the programs initiated under the CARES Act, including $310 billion of additional funding for the Paycheck Protection Program (PPP) loans administered by the Small Business Administration (SBA). There have also been revisions to the Medicare Accelerated and Advance Payment Program and expansion of the HHS “Lost Revenue/Increased Cost” Grants.