Senate Passes the PPP Flexibility Act
On June 3, 2020, the United States Senate unanimously passed House bill H.R. 7010, the Paycheck Protection Program Flexibility Act.
This bill amends the Paycheck Protection Program (PPP) by expanding the period for payroll coverage. The bill also eases some of the re-hiring burdens on employers looking for loan forgiveness and lessens the percentage of payroll and nonpayroll expenses which can be forgiven under the PPP loan forgiveness program.
Specifically, H.R. 7010 bill expands the period for loan forgiveness from the current 8 weeks to 24 weeks. This bill is a response to many businesses whose doors have still been unable to re-open due to many states' Stay At Home Orders. The bill also reduces the percentage of payroll and nonpayroll expenses which can be forgiven under the PPP loan forgiveness program from 75% payroll and 25% nonpayroll to now 60% payroll and 40% nonpayroll.
Furthermore, the bill extends the period for employers to re-hire employees who were let go after February 15, 2020 from June 30, 2020 to December 31, 2020. The bill also grants greater flexibility to employers by allowing them to make a good-faith effort to re-hire employees let go after February 15, 2020 without seeing a reduction in their loan forgiveness amount. Finally, the bill extends the time frame for repayment of all or a portion of a companies PPP loans from 2 years to 5 years. The repayment period for those loans is deferred until the loan forgiveness amount is determined or 10 months from the last day of the covered period.
Having passed quickly out of the House and Senate, by a nearly unanimous agreement, it is expected that President Donald Trump will sign the bill into law very quickly. You may view the full text of H.R. 7010 by clicking here.
If you have any questions or comments on the bill please contact Jake Jacoby at firstname.lastname@example.org or Andrew Stasiowski at email@example.com.