What is the Paycheck Protection Program Flexibility Act of 2020?
On June 5, 2020, the president signed into law the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010), which eases restrictions on Paycheck Protection Program (PPP) loans and gives business owners more flexibility in spending loan funds.
The following are key provisions of the Act:
- The new law extends the forgiveness period that borrowers can spend funds from 8 weeks to 24 weeks and lessens the payroll expenditure requirement from 75% to 60%.
- With regards to forgiveness requirements for headcount levels, borrowers have a 24-week period to restore workforce levels to pre-pandemic levels. If borrowers are unable to restore to full levels, there are two exceptions including the inability to rehire past employees and find new employees or the inability to return to the same level of business activity due to compliance with safety operating requirements.
- Repayment of the loans can be extended to five years, instead of two, and some payroll taxes can be deferred.
ChiroTouch provides this information with the understanding that authors or speakers are not experts in finance, regulatory policy or law. ChiroTouch shares this information to the best of our knowledge and experience. The information is subject to change as the COVID-19 crisis evolves.