Bill increases flexibility in spending COVID-19 aid
President Trump signed the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010) . This bill modifies several provisions regarding the forgiveness of loans to ease usage restrictions and increase the time businesses are able to utilize PPP funds.
Major provisions of the bill include:
- An extended forgiveness period, which gives businesses the option to extend the covered period from the original eight weeks to twenty four weeks beginning on the date of origination of a covered loan to December 31, 2020 (twenty-four weeks).
- An extension of the Jun 30th safe harbor for rehiring employees.
- A reduced payroll spending requirement from 75% to 60%.
- An extended time for borrowers to repay loan funds that are not forgiven (from 2 year to 5 years).
- The opportunity to for businesses that receive loan forgiveness to defer the employer portion of FICA taxes for the remainder of 2020. Prior to this Act, deferment was only allowed through the date the forgiveness determination was made.
This Act allows businesses to more easily achieve full, or at least a greater amount of, forgiveness for their PPP loans.
Businesses that are finishing their initial 8-week covered period may want to wait to complete their forgiveness applications until the revisions from this Act have been incorporated into the forgiveness forms.
If you have questions regarding a new or current PPP loan, please contact a CGA Business Law attorney.
If you have questions regarding your workforce or re-opening your business, please contact a CGA Labor and Employment Law attorney.
For updates or resources to assist your business during the pandemic, please visit the CGA COVID-19 Resource Page on our website.
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