Paycheck Protection Program (PPP) Flexibility Act of 2020 – Mark Rodruck, Partner, CPA
On June 5, 2020, President Trump signed into law the PPP Flexibility Act of 2020. This amends the PPP giving borrowers more freedom or flexibility in spending the PPP funds and retaining the possibility of full forgiveness. Some key takeaways are as follows:
+ Forgiveness period was increased to 24 weeks, up from 8 weeks, giving borrowers more time to spend the loan proceeds and still obtain forgiveness.
+ However, you still have the option to keep the original 8-week spending period if you had the loan before the Flexibility Act was passed.
+ Mandatory payroll spending was reduced to 60% down from 75%
+ Two new exceptions let borrowers obtain full forgiveness even without fully restoring their workforce.
+ The term of the loan has been extended to five years up from the original two years.
+ Paying payroll taxes can now be delayed even while using the PPP loan.