On June 8th, SBA Administrator Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin issued a Joint Statement “Regarding Enactment of the Paycheck Protection Program Flexibility Act”.
They summarized the main points of the Act and clarified a few things that were previously unclear to folks who didn’t read it in full and who missed the accompanying Congressional Statement of Intent. Luckily if you are a regular reader of this blog, you got the news correct first-time around.
(And yes, I am annoyed by old-white-cis-male attorneys telling me that the points I pulled directly from the AICPA Town Hall and their summary were “matters of my opinion”. Anyone who knows me knows I do not take being condescended to well — especially not by lawyers, and especially not by white male lawyers. But I digress.)
But they also made a very important additional point: they eliminated the 60% “cliff” Rubio was worried about, and stated unequivocally, “If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.”
They also noted that they “will promptly issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing these legislative amendments to the PPP”.
The full text of the statement is located on the Treasury’s website.
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