June 02, 2020
Updated on June 5th, 2020
As we steer business forward together, here is recent legislative action that provides greater flexibility in how business owners can spend Paycheck Protection Program (PPP) loan proceeds while still allowing those expenses to qualify for loan forgiveness.
The President has signed into law the H.R. 7010, the Paycheck Protection Flexibility Act, which modifies several restrictions in the existing PPP.
The Paycheck Protection Program Flexibility Act would amend the PPP to provide businesses with the following relief:
- Extends the loan term from 8 weeks to 24 weeks
- Lowers the percentage of loan proceeds that must be used on payroll from 75% to 60%
- Extends the PPP from June 30th to December 31st, 2020
- Provide more leeway on loan forgiveness for business owners who show they could not rehire workers or reopen due to safety standards
- Let companies that get loan forgiveness defer payroll taxes
We encourage all clients to continue collecting detailed information regarding your approved expenses, such as payroll, rent, utilities, etc. and review the applications that have been released by the SBA as a guide. This can be downloaded here: SBA PPP Loan Forgiveness Application Form