On June 5, President Trump signed the Paycheck Protection Program (PPP) Flexibility Act of 2020, which provides more flexibility for participants in the loan program. This includes allowing participants to defer the payment of certain payroll taxes that the Coronavirus Aid, Relief and Economic Security (CARES) Act prevented them from deferring.
The new law will also:
- Allow businesses 24 weeks instead of eight weeks to use the loan money,
- Modify the restrictions limiting non-payroll expenses from 25% to 40% of loan proceeds,
- Require loan recipients to comply with COVID-19 safety standards,
- Change loan terms to give borrowers five years to repay, rather than two years, and
- Extend the rehiring deadline.
The PPP is designed to help small businesses sustain operations and keep workers employed during the COVID-19 pandemic. The program, which kicked off on April 3, provides loans that are forgivable if certain requirements are met. The deadline for applying for a PPP loan remains June 30, and the funds for this Small Business Administration program are limited.
President Trump signed the law during a press conference in which he discussed the favorable Bureau of Labor Statistics report, showing job gains and a lower unemployment rate than expected.
If you have questions about the PPP in your situation, contact us.