House Passes Payroll Protection Program Flexibility Act

On May 28, 2020, the House of Representatives passed the Payroll Protection Program Flexibility Act. The Act would make the following changes to the PPP program.

• It would increase the covered period for expenses paid or incurred from 8 weeks to 24 weeks.
• It would extend the term of the loan from 2 years to 5 years.
• It would change the requirement that 75% of forgivable costs must be spent on payroll to a requirement that 60% of the forgivable costs must be spent on payroll.
• The June 30, 2020 rehiring deadline would be extended to December 31, 2020.
• It would allow small businesses to both use the PPP and defer their 2020 employment taxes until 2021 and 2022.

The bill must pass the Senate and be signed by the president before it becomes law. The Senate is scheduled to take up this measure or an adjusted measure when they return next week.

If you have any questions regarding how this can affect your loan forgiveness strategy or this alert, please contact your Whittlesey advisor.