On Wednesday evening, the U.S. Senate passed the House’s bill called the Paycheck Protection Flexibility Act. The changes to the Paycheck Protection Program (PPP) triple the amount of time for PPP recipients to spend the funds from eight weeks to 24 weeks.
Other changes include:
- The payroll expenditure requirement drops to 60% from 75%. However, borrowers must spend at least 60% on payroll or none of the loan will be forgiven.
- The new deadline to restore a borrower’s workforce to pre-pandemic levels is now December 31. Previously, it was June 30.
- The new bill allows borrowers to adjust if they could not find qualified employees or were unable to restore business operations to February 15, 2020 levels due to COVID-19 related operating restrictions.
- The loan can now be repaid within five years, instead of two. The interest rate remains at 1 percent.
- PPP recipients can now delay payroll tax payment.
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