Updated 6/8/2020. President signed the Paycheck Protection Program Flexibility Act into law on June 5, 2020.
On June 3, 2020, the U.S. Senate passed the Paycheck Protection Program Flexibility Act (PPPFA). The vote was a voice vote and the PPPFA passed without amendment to the U.S. House of Representatives’ version, which passed the House by a 417 to 1 margin. The PPPFA, amends the Small Business Act and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) by modifying certain provisions related to the forgiveness of loans under the Paycheck Protection Program (PPP).
The bill is now headed to President Trump for his signature, which is expected and would make the bill law. The bill’s passage is likely welcome news to thousands of small businesses who will now have greater access to and more flexibility with PPP funds. Some of the key changes to the PPP include:
- Lowering from 75% to 60% the minimum portion of a PPP loan that must be spent on payroll. The 40% balance must be spent on rent, utilities, and other business-related expenses.
- Extending the amount of time the loan can cover from eight to 24 weeks.
- Extending the time new PPP loans must be paid back from two to five years if the amount provided doesn’t convert into a grant.