On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) which gives employers increased flexibility when using Paycheck Protection Program loan money and applying for loan forgiveness.
The PPPFA is intended to make PPP Loan money easier to use for all small businesses. It changes the parameters for how loan money may be spent and the length of time an employer can use PPP Loan funds and get the amounts forgiven.
Important changes to the PPP Program include:
- Employers have 24 weeks or until December 31 (instead of 8 weeks) to use the funds and be eligible for forgiveness.
- Employers must use 60% (instead of 75%) of funds on payroll costs.
- Employers have until December 31 (instead of June 30) to rehire certain laid-off employees if seeking forgiveness.
- The maturity date of the PPP loan is five years (instead of 2 years) for new borrowers.
The changes to the PPP Loan program will make it easier for employers to increase their ability to achieve full loan forgiveness. Employers still must document their use of the loan proceeds and properly substantiate expenses.
