The Paycheck Protection Program Flexibility Act Was signed into law. Below are some of the highlights:
- Extends PPP coverage period through December 31, 2020.
Gives 24 weeks rather than 8 weeks to spend
- If business received PPP prior to June 4, 2020 they can retain the 8 week covered period, can elect to do 24 weeks but may need to demonstrate compliance with requirements to maintain employee levels for 24 weeks.
- No new loans after June 30, 2020.
- Reduced percentage that must be spent on payroll from 75% to 60% - can spend more on overhead and fixed expenses such as rent and utilities.
- Extends the Safe Harbor restoration deadline from June 30, 2020 to December 31, 2020.
Will not reduce forgiveness based on inability to rehire employees if employer can document:
- Written offer to rehire individuals who were employees of the organization on February 15, 2020.
- Inability to hire similar qualified employees for unfilled positions by December 31, 2020.
- Forgiveness will not be reduced for failure to maintain employment levels if organization is able to document an inability to return to same level of business activity that existed prior to February 15 due to compliance with COVID legislation.
- Loan repayments: extends the deferral period from six months to the time when the SBA compensates the lender for forgiven amounts, except that repayments can be required if the borrower has not applied for forgiveness within ten months of the expiration of the borrower's covered period.
- Terms of PPP loan extended from two years to five years
- Can defer social employer Social Security taxes even if you receive PPP loan .