Yesterday, U.S. House lawmakers approved the Paycheck Protection Program Flexibility Act of 2020, H.R. 7010. If passed by the Senate and enacted as is, this legislation would do the following:
- Extend the PPP loan application deadline from June 30, 2020 to December 31, 2020.
- Extend the time frame to use the loan funds from 8 weeks to 24 weeks, and provide a safe harbor for some FTE reductions.
- Reduce the percentage of the loan amount required to be used for payroll costs from 75% to 60%, which means that 40% of the funds received by the borrower could be used on qualifying non-payroll expenses.
- Increase the loan deferral period from 6 months to 10 months, and extends the loan term on any unforgiven loan amount from two years to five years.
Although it is anticipated the Senate will pass the bill, there are likely be some compromises. We will keep you informed of any changes.