Withum COVID-19 Bill Update – 6/8/2020

June 8, 2020

The PPP Flexibility Act was signed into law on Friday, June 5. Over the last few weeks we have covered many important components of the Bill, our latest article covers more of the salient points as well as the nuances that all borrower need to be aware of. The topics in the article include:

  • The 60/40 Rule (replacing the 75%/25% rule) appears to include a “cliff” effect, providing no forgiveness if you do not spend 60% of your proceeds on payroll.
  • New ways to be exempt from the FTE reduction calculation, including  if a borrower can document an inability to return to the same level of business activity as it was operating at before February 15, 2020, due to compliance with requirements or guidance issued by the CDC, OSHA or HHS during the period from March 1, 2020 to December 31, 2020.
  • Extension of the Covered Period – Important considerations borrowers should contemplate which may lead them to elect to keep an 8 week period as it is now otherwise automatically extended to 24 weeks.
  • Extension of Loan Maturity Date – New terms for borrowers who received a loan after June 5th, however a potential window to extend maturity for borrowers who received loans prior to as well.

Reminder Section:  (what should I be doing):

  • Call your payroll company about claiming the payroll tax deferrals and employee retention credits that were made available in the CARES Act.
  • Talk to your payroll company about the Sick Pay Bill (passed prior to the CARE Bill).
  • Consider speaking with your bank to discuss changes to terms of existing debt facilities. The banking system remains strong.
  • If you have already applied for the PPP, start forecasting how you intend to spend the funds and how to qualify for the highest amount of forgiveness possible.
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As part of MCAA’s efforts to connect our contractor and manufacturer/supplier members, we have added a new Manufacturer/Supplier Training area on http://MCAA.org. Visit to connect with the latest training opportunities from our supplier partners.

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