Congress Makes Changes to Paycheck Protection Program

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President Trump has signed into law the Paycheck Protection Program Flexibility Act (PPPFA), an attempt to address challenges around the Paycheck Protection Program (PPP) aimed at providing COVID-19 relief.

The legislation:

  • reduces the amount of the loan needed to be spent on payroll from 75% to 60%
  • extends the time period to use funds from 8 to 24 weeks
  • pushes back a June 30 deadline to rehire workers to December 31, 2020
  • extends the rehire date to December 31, 2020
  • adds additional exceptions for a reduced number of FTEs. The law states a business can still receive forgiveness on payroll amounts if it:
    • Is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;
    • Is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or
    • Is able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to February 15, 2020.
  • extends the repayment term from 2 years to 5

FMI: To read the legislation, go to https://www.congress.gov/bill/116th-congress/house-bill/7010/text.

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