Senate Passes the Paycheck Protection Program (PPP) Flexibility Act of 2020
Late Wednesday, the Senate passed the House version of the Paycheck Protection Program (PPP) Flexibility Act of 2020 which triples the time period for PPP borrowers to spend the funds and qualify for forgiveness. The Act now heads to the President’s desk for his signature. Below is a summary of the main points of the legislation:
- Extension of the covered period from eight weeks to the earlier of 24 weeks or December 31, 2020.
- The payroll expense requirement drops to 60% from 75%, but be aware that the legislation now appears to provide a cliff, meaning borrowers must spend at least 60% on payroll or none of the loan will be forgiven.
- Borrowers have until December 31 to restore workforce and wages to February 15 levels extending the previous June 30 deadline.
- Borrowers can now defer certain payroll taxes previously prohibited under the CARES Act.
- Borrowers now have five years to repay any unforgiven PPP loan funds instead of the previously provided two years.
- New exceptions have been created to allow borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce.
We expect the SBA to provide additional guidance regarding the implementation of the Act along with changes to the previously released forgiveness application. Please reach out to your BMSS advisor to discuss how these changes may affect you and your business.