Update: Changes to the Terms of the PPPPosted on Jun 5, 2020 in News
Today, the Paycheck Protection Program Flexibility Act was signed into law, providing small businesses with more time and more flexibility to use their Paycheck Protection Program (PPP) loans. The new law:
- Increases the amount that can be used on rent, utilities, and other overhead costs from 25 percent to 40 percent; and it lowers the amount that must be used on payroll costs from 75 percent to 60 percent;
- Extends the period of time that small businesses can use their loan from 8 weeks to 24 weeks and extends the entire program to December 31, 2020;
- Allows small businesses to receive loan forgiveness even if they had trouble rehiring employees or if they have not been able to return to a full operating status;
- Allows small businesses to repay any amount that is not forgiven over five years, instead of just two years; and
- Allows small businesses with PPP loans to defer their payroll taxes as provided in the CARES Act.
The Paycheck Protection Program provides small businesses – including restaurants, hotels, and non-profits – with zero-fee loans of up to $10 million to cover payroll and other operating expenses. For more information on the PPP, visit www.schatz.senate.gov/coronavirus/small-businesses/sba-paycheck-protection-loan-program.