Congress recently agreed to updates to the Paycheck Protection Program (PPP) with the new Paycheck Protection Plan Flexibility Act, which President Trump signed into law last week.
The new law was written with bipartisan support and seeks to solve a number of challenges that have arisen in recent months within the paycheck program.
Key changes include extending the period in which a business can use PPP funding from eight to 24 weeks, lowering the threshold in which a borrower is required to use PPP funds on payroll to ensure loan forgiveness from 75 percent to 60 percent, and adding protection for businesses who are unable to return to full-time equivalent employment levels held before the outset of the pandemic.
Borrowers now have nearly a year, 10 months, to request loan forgiveness under the plan, and loans granted under the new Act will have a minimum repayment term of five years.
“This bill will provide businesses with more time and flexibility to keep their employees on the payroll and ensure their continued operations as we safely reopen our country,” said U.S. Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza in a joint statement. “We look forward to getting the American people back to work as quickly as possible.”