By Sarah Dobson, Director of Public Policy and Advocacy, and Christopher Findlay, Senior Marketing Manager
President Trump signed the Paycheck Protection Program Flexibility Act (H.R. 7010) into law last week Friday. The act provides additional flexibility for recipients of Paycheck Protection Program (PPP) loans by:
- Extending the original eight-week period where entities needed to use the money to qualify for loan forgiveness to 24 weeks.
- Changing the original 75/25 rule to now require funding recipients to use 60 percent of the money for payroll costs and no more than 40 percent on other costs.
- Easing the rehiring requirement based on inability to rehire former or similarly qualified employees, or possible inability to return to operations levels, and extending the rehiring deadline to the end of the year.
- Increasing the maturity timeline for new loans to five years.
- Deferring payments of principal, interest, and fees until the date the lender receives payment for the forgiven amount of the loan, or 10 months after the end of the covered period.
- Making PPP participants eligible for employee payroll tax deferral.
The remaining PPP funds, which are estimated at up to $120 billion, are expected to be allocated quickly. Those eligible are encouraged to apply as soon as possible. More information about the rollout is expected at today’s Senate Finance Committee hearing, which you can watch live at 2:30 p.m. ET here.