Received a PPP Loan before June 5? Contact your banker Now!
One of the provisions of the PPP Flexibility Act was to extend the repayment period of any PPP loan NOT forgiven from 2 years to 5 years. This provision is automatic for PPP loans funded on/after June 5, 2020.
For PPP loans funded before June 5, banks are "encouraged" to change the repayment schedule from 2 years to 5 years.
Therefore, if you received your PPP loan before June 5, contact your banker immediately and ask that they amend your PPP loan documents to change the repayment period to 5 years for any amount not ultimately forgiven.
Having a 5 year repayment term will reduce the monthly payment, thereby freeing up more funds for operations. Of course, interest is a factor. However, at 1% (the interest charged on all PPP loans), the interest cost will be minimal.
We hope you found the above helpful. And again, we are available if you have questions, concerns or need assistance.