The Paycheck Protection Program Flexibility Act Eases PPP Requirements

To address the challenges that many small-business owners faced, Congress took up bipartisan legislation in the form of the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010). On June 5, the legislation was signed into law to give employers more flexibility when using Paycheck Protection Program (PPP) funds and applying for loan forgiveness. 

Changes include: 

• An increase in PPP loan forgiveness period from 8 weeks to 24 weeks

• Allows PPP loan recipients a reduction in the percentage of funds that must be used for payroll costs to 60%, rather than 75%, of their loan proceeds

• An extension of time to meet the full loan forgiveness requirements (to December 31, 2020) 

• Increases the minimum maturity of the loan from two to five years (if loan isn’t forgiven)

• Extends the loan payment deferral period to 10 months (if forgiveness isn’t requested)

• Allows payroll tax deferral for PPP clients

• Extends the June 30 rehiring deadline to Dec. 31 to allow employers to rehire certain laid-off workers 

As always, if you have questions about how Paycheck Protection Program Flexibility Act or how the PPP affects your business, please call us so we can help you further.