Paycheck Protection loans just got easier

The Signal Business News

To give small businesses a little reprieve from the strict guidelines put forth in the Paycheck Protection Program, President Donald Trump signed House Resolution 7010, or the “Paycheck Protection Flexibility Act,” into law recently.

While the PPP, which was created as part of the CARES Act, provided businesses with forgivable loans to cover payroll and other expenses, the flexibility act then modifies some provisions of the program related to the forgiveness of the loans.

Those changes to the PPP include: 

  • Extending the loan term from eight weeks to 24 weeks, though borrowers could still elect to have the eight-week period apply.
  • Lowering the percentage of loan proceeds that must be used on payroll from 75% to 60%.
  • Extending the PPP from June 30 to Dec. 31.
  • For the portion of the loan that isn’t forgiven, the measure extends the loan term from two years to five years.

As businesses begin to slowly reopen, this act acknowledges the needs of PPP borrowers, many of whom have yet to reopen fully. 

In addition, the act eases requirements for non-payroll costs, ensures payroll tax deferment, and extends payment deferment and the rehiring deadline.

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