Paycheck Protection Program (“PPP”) Update – Flexibility Act of 2020 (“Flex Act”)
On June 5, 2020 President Trump signed H.R. 7010, The Paycheck Protection Program Flexibility Act of 2020 (Flex Act). The Act updated and modified certain provisions relating to the loan forgiveness program under the PPP. Below are some highlights from the Act as they pertain to the PPP loan forgiveness:
- The Act increases the maximum percentage of loan proceeds that can be used on non-payroll costs to 40%, meaning that loan proceeds need to be used at least 60% or more on payroll costs. Previously this was 75% on payroll costs and 25% on non-payroll costs.
- The Act extends the “covered period” that a borrower may use the PPP proceeds from 8 weeks to the earlier of 24 weeks following the disbursement or December 31, 2020. A borrower can still elect to use the 8-week period if they choose to.
- For new loans only, the maturity date is extended to five (5) years from the original two (2).
- The Act extends the “Safe Harbor” date for rehiring employees from June 30, 2020 to December 31, 2020.
While there are other modifications in The Flex Act the above are the highlights. If you have any questions pertaining to The Flex Act or the highlighted items above please contact Detweiler, Hershey.Filed in: Client News, Community, News