On Friday, June 5th, President Trump signed into law H.R. 7010
, the Paycheck Protection Program Flexibility Act of 2020. The legislation modifies provisions related to the forgiveness of loans under the Paycheck Protection Program (PPP). As TCIA members know, this program was created by Congress in late-March to help keep small businesses afloat during the COVID-19 pandemic. The PPP offers low interest loans, which can be forgiven if certain criteria are met.
H.R. 7010 provides businesses with more flexibility to spend PPP funds on the non-payroll portion of a forgivable covered loan. Businesses will now qualify for forgiveness if they spend at least 60% of their PPP loan on payroll—originally, the program required 75% of the PPP funds to be spent on payroll which was a difficult threshold to meet for some small businesses.
The new law also extends the time businesses have to spend the money—from an 8-week period to a 24-week period—while remaining eligible for forgiveness which will be a welcome change for TCIA members, some of whom may have had difficulty spending all their PPP money in 8 weeks.
Some other changes to the PPP included in this law give employers more flexibility on rehiring requirements and extend the repayment term of the loans from two years to five years. More information on all of these points is forthcoming, but these changes appear to be welcome changes for a program that has helped TCIA members weather the COVID-19 storm.
More guidance on this law is certain to come from the SBA and Treasury, so TCIA members interested in the PPP should remain on the lookout for more news clarifying these program changes. TCIA remains committed to providing our members up-to-date, relevant information on the COVID-19 pandemic. Please reach out to Aiden O’Brien (firstname.lastname@example.org
) with any questions, or if you have had difficulty applying for loan forgiveness.