The Senate has officially passed the Paycheck Protection Program Flexibility Act of 2020
Late Wednesday night, the Senate signed the House Bill, Paycheck Protection Program Flexibility Act of 2020 and is expected to be signed by the President today.
This bill will help small businesses gain more access to the PPP loan program and loosen some of the key loan forgiveness requirements.
Key Changes from the PPP Flexibility Act include:
- PPP borrowers will have the option to extend the eight-week period to 24 weeks.
- The requirement of how much the borrower has to spend on payroll decreased to 60% from 75%. Note: Borrowers must spend at least 60% on payroll or none of the loan will be forgiven.
- Within the 24-week period, borrowers are required to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness.
- The Bill includes two new exemptions based on employee availability. Borrowers can determine a proportion reduction, if in good faith, they are able to document the inability to rehire those who were employees of the borrower on February 15, 2020 or the inability to hire similarly qualified employees for the unfilled positions.
- Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.
- Borrowers can now also delay the payment of payroll taxes.
The Paycheck Protection Flexibility Act of 2020 can be found here.
The new requirements and extensions will affect the excel calculation form that we have put together, therefore we will go through it carefully to ensure we are providing the most correct and up-to-date information. We will release the updated calculation form as soon as possible.