Today President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) in an attempt to address many concerns expressed by the small business community around the Paycheck Protection Program (PPP) aimed at providing COVID-19 relief.
NEW RULES FOR PPP LOAN FORGIVENESS:
- Extends the forgiveness period for PPP loans from 8 to 24 weeks.
- Reduces payroll spending requirements from 75% of loan funds to 60% of loan funds, the remaining 40% must still be spent on eligible expenses such as Rent, Mortgage interest and utilities.
- Extends from two to five years the time new PPP loans must be paid back if the amount provided doesn't convert into a grant.
- Extends deadline to rehire workers beyond June 30th to December 31st 2020.
- Adds additional exceptions for a reduced head count. The law states a business can still receive forgiveness on payroll amounts if it:
- Is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;
- Is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or
- Is able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to February 15, 2020.