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Paycheck Protection Program Flexibility Act

Submitted by SJPL Works on Sat, 06/06/2020 - 10:00 AM
finance, business handshake

On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (PPPFA) was signed into law. This new law amends the original Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to loosen restrictions placed on PPP loans and provides much needed relief to many businesses currently using PPP loan proceeds and preparing to seek loan forgiveness within the requirements of the CARES Act.

Key Changes

Here are some of the new PPPFA changes to the PPP:

  1. The covered period of the loan now ends Dec. 31 instead of June 30.
  2. Expands the forgiveness period for expenses to 24 week from eight weeks.
  3. Reduces the proportion of the loan that businesses must spend on payroll to be eligible for full forgiveness. Only 60% of the loan needs to be spent on payroll, down from 75%.
  4. Eases rehire requirements. The new law made changes to the requirements on bringing back workers and gives small businesses until December 31, 2020 to restore their workforce to pre-pandemic levels. The bill also created new exceptions that excuse a business from bringing back workers if they can document that they were unable to re-hire a worker or a similarly qualified worker. They can also be excused from bringing back their workforce to pre-pandemic levels if they can document a health or safety requirement related to COVID-19 that restricted their business.
  5. The payback period for new loan applicants has been extended from two years to a minimum of five. Unfortunately the bill did not make the extension retroactive for those who already taken out a loan.
  6. Employers can now defer their portion of payroll taxes. Taxes incurred in 2020 are to be paid in two installments: Half is owed by December 31, 2021, and the other half by December 31, 2022.

The SBA will be publishing updated information soon and the recently-issued Loan Forgiveness Application Form and the Interim Final Rules will be amended. For more information, please visit the Small Business Administration.

PPP Resources

For help with PPP, please visit these organizations that offer free to low-cost assistance to businesses:


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