WASHINGTON, DC — On June 5, President Trump signed the Paycheck Protection Program Flexibility Act of 2020 into law. An amendment to the Paycheck Protection Program (PPP), part of the CARES Act, the PPP Flexibility Act expands its loan forgiveness provisions from eight to 24 weeks, or until Dec. 31, 2020, whichever is earlier.
The CARES Act, enacted March 27, includes the PPP program, which subsidizes small businesses in an effort to help them cover payroll and overhead expenses, and also to help them rehire laid off employees.
Under the original CARES Act PPP rules, the requirements for loan forgiveness included stipulations for how quickly the loan money had to be spent. To be forgiven, PPP loans would need to be spent within an eight-week period of time. The PPP Flexibility Act extends that “covered” period to 24 weeks from the date the PPP loan originated, or Dec. 31, 2020, whichever comes sooner.
The original PPP rules also included a requirement that 75 percent of the loan money go toward paying employees. The PPP Flexibility Act drops that payroll percentage requirement to 60 percent.
Although the original deadline to apply for PPP funding was June 30, on that very day, the House of Representatives joined the Senate in unanimously approving a deadline extension to Aug. 8. Trump approved that deadline extension on July 4.
For more details on how the PPP Flexibility Act made its way into law, go to www.plsn.me/PPPF.
