PPP Flexibility Act eases restrictions on borrowers

This past week, the Paycheck Protection Program (PPP) Flexibility Act of 2020 was signed into law, providing businesses with more time and flexibility to keep their employees on the payroll and ensure their continued operations as we safely reopen.

Some of the key provisions include:

• Extends the time period in which borrowers must spend their PPP loans from 8 weeks to 24 weeks.
• Lowers the percentage of loan proceeds that must be spent on payroll from 75 to 60 percent.
• Extends the loan coverage period from June 30 to December 31, 2020.
• For the portion of the loan that isn’t forgiven, the measure extends the loan term from 2 years to 5 years.

SBA will soon issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing these legislative amendments to the PPP.