PPP Forgiveness Gets a Make-Over

Paycheck Protection Flexibility Act triples time for loan recipients and lowers threshold for forgiveness.



The U.S. Senate passed the House version of Paycheck Protection Program (PPP) legislation Wednesday night, tripling the time allotted for small businesses and other PPP loan recipients to spend the funds and still qualify for forgiveness of the loans.


The key provisions and changes are designed to make it easier for more borrowers to reach full, or almost full, forgiveness.

  • Current borrowers can extend the eight-week period to 24 weeks or keep the eight-week period.

  • New PPP borrowers will have a 24-week covered period, but the covered period can’t extend beyond Dec. 31, 2020.

  • The payroll expenditure requirement drops to 60% from 75%, BUT borrowers must spend at least 60% on payroll or none of the loan will be forgiven.

  • Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.

  • New borrowers now have five years to repay the loan instead of two.

  • Businesses that took a PPP loan can delay payment of payroll taxes.

The Senate approval sent the House bill, called the Paycheck Protection Flexibility Act, to President Donald Trump, who signed it Friday.


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