On June 5, 2020, the Paycheck Protection Program Flexibility Act (“PPPFA”) was signed into law, amending the Paycheck Protection Program (“PPP”). The PPPFA provides borrowers with more flexibility to obtain full loan forgiveness on PPP loans.
Here are some notable changes:
- Borrowers now have 24 weeks to spend the loan proceeds instead of 8 weeks.
- The amount of loan proceeds needed to be spent on payroll has been reduced from 75% to 60%.
- Two new exceptions have been added to FTE based forgiveness reduction:
- 1. If Borrower is unable to hire similarly qualified workers by December 31, 2020; and
- 2. If Borrower is unable to return to the normal business activity levels due to compliance with government regulations related to COVID-19.
- Borrower may defer the loan payment until the amount of forgiveness is remitted by the SBA to the borrowers.
- The repayment period has been increased from 2 years to 5 years.
Please contact us at email@example.com If you have any questions about the PPPFA and the changes to the PPP loan forgiveness.