On June 7, the Paycheck Protection Program Flexibility Act was passed into law, extending the covered period in which borrowers can use Paycheck Protection Program (PPP) loan funds from eight weeks to 24 weeks. The extension applies even if you received a PPP disbursement prior to the enactment of this new rule, and could be especially helpful to those without business overhead — aka most freelancers.
Keep in mind that if you elect to use the 24-week covered period, the amount that can be forgiven cannot exceed 2.5 months’ worth of 2019 compensation for any self-employed individual, and the amount that can be forgiven is capped at $20,833 per individual.
If you did receive a PPP loan, you are (hopefully) aware that, originally, the Small Business Administration had permitted borrowers to use the cash to cover eight weeks of their income and some expenses. This new rule extends the “covered period” for PPP loan forgiveness from eight weeks after receipt of the funds to the earlier of 24 weeks after loan receipt or December 31, 2020.
Now that the covered period for PPP has been extended, it is important to understand how this may impact you as a freelancer. Here is an