On June 5th, 2020 the Paycheck Protection Program Flexibility Act of 2020 was signed into law. The Act eases restrictions on how businesses can spend their Paycheck Protection Program (PPP) funds, giving business owners a better chance of qualify for loan forgiveness.
The Act:
- Lengthens the allowable timeframe to spend PPP funds from eight to 24 weeks
- Lowers the percentage of PPP funds that must be spent on payroll from 75% to 60%
- Extends the covered period for the loan to December 31, 2020
- Authorizes a delay of employer tax payments through the end of 2020
- Waives the reduction in loan forgiveness if a business can show that some employees declined to return to their jobs
- Extends the payback period from two to five years for those who need it
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