Digitally planning for the PPP process

On June 5, 2020, in a rare display of bipartisanship, updates to the Paycheck Protection Program (PPP) were signed into law. Under the CARES Act, the Small Business Association (SBA) implemented PPP to combat the economic fallout of COVID-19. It provides small businesses with the necessary funds for payroll, benefits, rent, utilities and interest on mortgages. These loans can be forgiven under certain qualifications.

Aptly named, the PPP Flexibility Act is designed to ease some burdens on small businesses who still needed more leeway. Changes include:

  • Reducing the amount of the loan needed to be spent on payroll to 60%
  • Extending the period to spend funds to 24 weeks (ending Dec. 31, 2020)
  • Easing rehire requirements
  • Allowing borrowers to delay paying payroll taxes
  • Extending the repayment term from two to five years if loans are not forgiven

While the August 8 application deadline remains in effect, these modifications can be a victory for small businesses. Lenders tracking the PPP process for their customers will need to take these changes into consideration, in addition to the compliance challenges and attention to detail the program demands. But using digital tools at an institution’s disposal can ease the process and ensure these loans are carried out, managed and forgiven as appropriate.


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