The U.S. Congress just passed a bipartisan bill called the Paycheck Protection Flexibility Act that makes several important changes to the Paycheck Protection Program (PPP).
The new law eases some of the program’s restrictions, giving small businesses more time to use their loans and letting borrowers spend more of their loans on non-payroll expenses.
Key changes to the PPP include:
- Extends the period to use PPP funds from 8 weeks to 24 weeks* Reduces the minimum payroll spend to 60% (from 75%)
- Borrowers can now use the 24-week period to fully restore their workforce levels and wages (December 31 instead of June 30)
- Businesses now have five years to repay the loan, instead of two
The new legislation also includes a number of updates and exceptions related to loan forgiveness, the rehiring of employees, and the payment of payroll taxes. We encourage businesses to read the new legislation and work with a financial professional to ensure they fully understand the updated requirements.
While demand for PPP loans has slowed, funding remains available. More information can be found on the SBA website, including a tool to find lenders that are still issuing PPP loans