Jun 11, 2020
New Law Gives Paycheck Protection Program Borrowers More Flexibility
On June 5, the “Paycheck Protection Program Flexibility Act” (H.R. 7010) was signed into law, giving physician practices and other businesses that have secured a Paycheck Protection Program (PPP) loan more time and flexibility for keeping employees on payroll and, consequently, eligibility for loan forgiveness.
On June 8, the U.S. Department of Treasury and Small Business Administration released a statement regarding enactment of the legislation, noting that rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing the legislative changes to the PPP will be forthcoming.
Notable changes to the program include extending the covered period for forgiveness from eight weeks to 24 weeks following loan origination and lowering the amount of the loan that must be used on payroll costs from 75 to 60 percent, with the forgivable amount scaling in proportion to the amount spent on payroll during the forgiveness covered period.