Congress Makes Changes to Paycheck Protection Program
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.
- 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.