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July 2, 2020

FROM: Steven Davi

Steven N. Davi

Executive Director and General Counsel

COVID-19 Update: Paycheck Protection Program

The United States House of Representatives on Wednesday, July 1, passed a six-week extension to the Small Business Administration’s Paycheck Protection Program — an action that followed a Senate vote for extension late Tuesday.  The PPP's initial $349 billion ran out two weeks from the program’s debut April 3; its second tranche in the amount of $310 billion has lasted far longer.  Approximately $130 billion remains, according to the most recent SBA data.  Pending approval by President Donald Trump, this Congressional action would extend the program into early August.

 This development follows the reopening in mid-June of the SBA’s Economic Injury Disaster Loan program to all small businesses.  This development also follows the roll-out of the revised application for Paycheck Protection Program loan forgiveness, also in mid-June.  Specifically, on June 17, the SBA, in consultation with the Department of the Treasury, posted a revised, more borrower-friendly PPP loan forgiveness application pursuant to the PPP Flexibility Act of 2020, which was signed into law by President Trump on June 5.  In addition, the SBA introduced a separate form, the “EZ version,” to streamline the process for borrowers who: 

  • are self-employed and have no employees;
  • did not cut back pay for their employees by more than 25% and did not reduce their head count or workers’ hours; or
  • saw a drop in business activity because of health directives related to COVID-19 and did not cut back employees’ pay by more than 25%.

According to the SBA, the EZ application requires fewer calculations and less documentation for eligible borrowers.

 We will continue to provide updates on any and all material developments in this regard as they occur.

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