Paycheck Protection Flexibility Act



Paycheck Protection Flexibility Act

Late last night (June 3rd), the Senate passed the Paycheck Protection Flexibility Act that the House of Representatives passed the week prior, without modification.  As such, the following changes will be available to PPP borrowers following Presidential signature:

  • For those borrowers who already hold a PPP loan, you can choose to extend the 8-week period to 24 weeks, or you can keep the original 8-week period. Any loans issued after the bill is enacted into law will be subject to the 24-week forgiveness period.
  • For borrowers who use the 24-week period, you must restore FTE and wage level metrics to February 15, 2020 levels by December 31, 2020 (previously June 30, 2020).
  • Increases to forgivable non-payroll expenses from 25% to 40%, but this now becomes an all-or-nothing where borrowers must spend at least 60% on payroll or none of the loan will be forgiven.
  • Additional exceptions to borrowers to achieve full PPP loan forgiveness if they do not fully restore their workforce:
    • Inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020
    • Document an inability to return to the same level of business activity as of February 15, 2020 due to compliance with requirements or guidance issued for the period February 15, 2020 – December 31, 2020 related to sanitation, social distancing, or other safety requirements related to COVID-19 from one or more of the following:
      • The Secretary of Health and Human Services (HHS)
      • Director of the Centers for Disease Control (CDC)
      • Occupation Safety and Health Administration (OSHA)
    • Extension of application deadline from June 30, 2020 to December 31, 2020.
      • Currently, over $120B of funds remain available
    • Extension of loan terms from 2 years to 5 years. The interest rate remains at 1%.
    • Permit PPP borrowers to access payroll tax deferment options.
      • We believe this continues to exclude the Employee Retention Credit for PPP recipients.

As we mentioned in our previous notice to you, we encourage PPP borrowers to understand their rate of spend of PPP funds to determine the most advantageous covered period (8 weeks or 24 weeks) for their particular situation.

If you have any questions or require any assistance with the forgiveness application, please let us know.  We have developed a Forgiveness Assistance solution that can be used to help you prepare or verify your forgiveness calculation.