PPP Flexibility Act – Bullet Points

PPP Flexibility Act – Bullet Points

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PPP Flexibility Act – Bullet Points 

Today the President signed into law legislation giving small business owners who applied for a federal aid program more flexibility in how they spend the loans.  From the new law signed into effect today: the Paycheck Protection Program Flexibility Act (PPPFA) is an attempt to address many concerns expressed by the small business community around the Paycheck Protection Program (PPP) aimed at providing COVID-19 relief.

  • Any portion of the PPP that is not forgiven will have a minimum of 5 years and a maximum of 10 years to repay, effective today
  • The covered period of the loan (timeframe for usage) has been extended to December 31, 2020
  • The PPP funds must be used either at the end of 24 weeks from the date of disbursement or December 31, whichever occurs first
  • Employers will have until December 31 to reinstate furloughed employees and retain the headcount of employees equivalent to the number utilized for the loan application
  • If an employer makes a good faith attempt, in writing, to rehire employees and they refuse to return, or if the employer is unable to replace employees who have declined work, the employer will not be penalized for their forgivable amount
  • The forgivable amount will not be reduced if the employer can provide documentation that returning to business operation levels before COVID was not possible due to social distancing, safety issues, or regulatory requirements
  • The percentage for payroll use of a loan has been reduced from 75% to 60%
  • Borrowers before today can still use the 8-week time period if they want
  • THE DEFERRAL PERIOD HAS BEEN REMOVED. The first payment is due on the date that any non-forgivable amount is determined by the lender.
  • A borrower will have 10 months after their covered period expires to submit a forgiveness application, so they can defer payments for that period of time. If they wait the full 10 months without applying for forgiveness, the first payment is due the following day.




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