Businesses and individuals who have been hit hard by the pandemic will find some favorable provisions in the new COVID Relief bill. A follow-up to the CARES Act of March 2020, this legislation also offers beneficial tax credits, forgivable business loans, and individual stimulus checks, while adding provisions to ensure focus on the businesses who have suffered the most.
The PPP Flexibility Act (H.R. 7010), which has been passed through Congress and signed into law, makes several changes to clarify and extend loan forgiveness requirements for businesses who received PPP loans. Here, we'll review the most significant provisions made by the bill.
This month, U.S. businesses swooped on the SBA's PPP loan funds. Congress has spent the past few days negotiating a second round of funding to help businesses pull through the stalling economy, to the tune of almost $500 billion. While the bill includes more than just funding for businesses, whether the problems in the first round of funding will be corrected remains to be seen.
As the dust settles from the first round of PPP applications, much more guidance is needed for lenders and borrowers on what is required for loan forgiveness. While the requirements and equations for loan calculations are spelled out in the CARES Act and subsequent releases, lenders and borrowers are receiving conflicting information. Apparently, there is more than one way to do math.