Corporate and Securities Partner David Cole was quoted in a Washington Business Journal article about the shifting terms and guidance around the Small Business Administration's Paycheck Protection Program (PPP). The shifting terms are raising confusion about nearly all aspects of the stimulus plan — including when and how long recipients have to draw down their funding. Per one deadline, a business must spend all of its PPP money within eight weeks of receiving it in order to maximize the program's loan-forgiveness guidelines. But the other is to spend the money on eligible expenses and rehire workers no later than June 30, leaving little time for businesses that are receiving funding in the program's second round, still underway, to reach maximum loan forgiveness. When asked what businesses should do, Mr. Cole advised that the money should be spent by June 30, at least barring any new SBA guidance.
"Practically, we see that this could create logistical problems for some borrowers closing loans during phase two of the PPP," Mr. Cole said. "We hope that new SBA regulations concerning forgiveness of PPP loans will address this question. The new regulations have been due for some time, but are not yet released."
READ: The Clock Is Ticking, Yet Widespread Confusion Remains On PPP Spending Deadlines (Subscription Required)
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