(from blumshapiro and Forbes) On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act. The act provides modifications that will allow organizations more flexibility in using the loan funds and qualifying for forgiveness. Highlights include:
- The covered period during which a loan recipient may use the funds for certain expenses while remaining eligible for forgiveness has been extended to 24 weeks from 8 weeks. Any business that borrowed its PPP loan prior to the date the bill is signed into law can elect to use the 8-week period beginning on the date it received the funds.
- To receive loan forgiveness, an eligible recipient must use at least 60% of the covered loan amount for payroll costs and may use 40% for the non-payroll portion (covered mortgage interest, covered rent, and covered utilities) of a forgivable covered loan, a change from the 75%/25% ratio before the new law.
- The new law pushes back a June 30 deadline to rehire workers to December 31, 2020 and eases rehiring requirements.
- The new law extends the repayment term from 2 years to 5.
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