The Paycheck Protection Program Flexibility Act: What You Need to Know


Earlier this morning the Paycheck Protection Program Flexibility Act (PPPFA) was signed into law. The Act addresses many of the concerns expressed by small businesses and their advocates and provides much needed relief for those borrowers who had received PPP loans. The new legislation:

  • Increases the covered period from eight weeks to 24 weeks
  • Reduces the percentage of funds that must go towards payroll from 75% to 60%
  • Changes the deadline for safe harbor on rehiring workers to December 31, 2020
  • Provides more flexibility for businesses who are able to demonstrate they were unable to rehire employees or return to previous levels of activity due to compliance with new safety requirements
  • Extends deferral of loan payments from six months until the date the forgiveness amount is approved by the SBA and provided to the lender
  • Allows businesses with a PPP loan to delay payment of federal payroll taxes, which was previously not authorized by the CARES Act

The SBA will now take time to interpret the Act and revise its Loan Forgiveness Application, released on May 15, 2020 and Interim Final Rule on Forgiveness released on May 22, 2020. In the meantime, we recommend to continue robust documentation–not only on forgiveness but also the other aspects of the program such as their calculations for their original loan application and their case for meeting the loan request need certification. If you need help or have questions, contact BPM’s Economic Recovery & Emergence Task Force members Terry Hill or Brett Hazlett here.