Recently, the Senate cleared the “Paycheck Protection Program (PPP) Flexibility Act of 2020” (H.R. 7010) by unanimous consent and sent the bill to the President for his signature. The House already approved the bill last week which provides businesses with more flexibility to spend PPP loans on payroll and other business expenses. The bill:
- Extends the PPP loan forgiveness period from eight weeks to 24 weeks or through the end of the year, whichever comes first.
- Reduces the 75 percent threshold needed to be spent on payroll to 60 percent which allows a greater percentage of the PPP loans to be used on rent and other approved non-payroll expenses.
- Increases the PPP loan repayment period from two year to five years.
- Allows businesses that receive loan forgiveness to defer payroll taxes.
- Extends the June 30 rehiring deadline to December 31, 2020. PPP loans will be forgiven if businesses restore staffing or salary levels that were previously reduced. The provision would apply to worker and wage reductions made from Feb. 15 through 30 days after enactment of the CARES Act, which was signed into law on March 27.
The White House has signaled it will sign the legislation into law.