BRAC’s June 4 COVID-19 Brief: Paycheck Protection Program Flexibility Updates

Last night the Senate passed H.R. 7010, the Paycheck Protection Program (PPP) Flexibility Act, an aim by Congress to fill some of the gaps and shore up some of the more restricting provisions of the PPP. Among the key changes, the legislation:

    • Extends the forgiveness period to 24 weeks (from 8)
    • Lowers the requirement that 75% of loan forgiveness be for payroll-related expenses to 60%
    • Changes the loan maturity from two years to five years, but not retroactively
    • Allows business to both take advantage of PPP forgiveness and receive payroll tax deferment
    • Extends the employee headcount requirement deadline from June 30, 2020 to December 31, 2020
    • Codifies the SBA forgiveness safe harbor for a good faith documented attempt to rehire to prior headcount
    • Creates a forgiveness safe harbor for not meeting pre-COVID headcount due to an inability to return to pre-COVID business operation level



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