On July 5, President Trump signed the Paycheck Protection Program Flexibility Act of 2020 into law. An amendment to the Paycheck Protection Program (PPP), part of the CARES Act, the PPP Flexibility Act expands its loan forgiveness provisions from eight to 24 weeks, or until Dec. 31, 2020, whichever is earlier.
Under the original CARES Act PPP rules, the requirements for loan forgiveness included stipulations for how quickly the loan money had to be spent, and a requirement that 75 percent of the loan money go toward paying employees. Along with its extension from eight weeks to a total of close to six months, the PPP Flexibility Act lowers the 75 percent employee payroll spending stipulation to 60 percent.
Enactment of the PPP Flexibility Act, widely seen as an important boost for industries suffering from Covid-19 shutdowns, followed more good news from Washington last week.
On June 30, hours before the application deadline for the $669 billion Paycheck Protection Program (PPP) was set to expire, leaving about $129 billion unclaimed, the House of Representatives joined the Senate in unanimously approving a deadline extension to Aug. 8. Trump approved that deadline extension on July 4.
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