Awaiting the President’s Signature: Paycheck Protection Program Flexibility Act
If your business took advantage of the Paycheck Protection Program, we are pleased to share with you some very good news about new flexibility with the program. On June 3rd, the US Senate passed the Paycheck Protection Program Flexibility Act. It was previous passed by the US House and is expected to be signed by President Trump today, retroactively dated to the passage of the CARES Act. Key provisions of the PPP Flexibility Act:
- Reduces the amount of the loan that must be spent on payroll costs from 75% to 60% to qualify for full forgiveness. It is critical to note here that no forgiveness will be granted unless at least 60% of the loan amount is used for payroll costs
- Extends the covered period for qualifying expenditures to 24 weeks (originally only eight weeks) or December 31, 2020, whichever is earlier
- Extends the deadline by which businesses must restore their reductions in workforce and worker pay from June 30 to December 31, 2020. Exceptions here may be available if the business is unable to hire the same employees, and also unable to hire qualified new employees; or if the business is unable to return to its previous level of business activity due to compliance with new health guidelines as a result of the pandemic.
- Permits borrowers who obtain loan forgiveness to continue to defer payroll tax payments for the balance of 2020.
- Extends the two-year repayment term for the loan to five years for any portion that is not forgiven and must be repaid.
Our own Congressman John Moolenaar served as a co-sponsor for this bill. We thank him for his leadership and support of the business community throughout the COVID-19 crisis.