What Is the Paycheck Protection Program Flexibility Act of 2020?

Please note that this blog is based on laws effective on June 5, 2020 and may not contain later amendments. Please contact Cray Kaiser for most recent information.

Congress has continued to legislate for the small business community, specifically targeting the Paycheck Protection Program (PPP) loans. On June 3, 2020, the Senate approved House Bill 7010 which is commonly referred to as the Paycheck Protection Program Flexibility Act of 2020. This bill provides some flexibility to small businesses in complying with the terms of the PPP loan. A few key features of this bill are summarized below.

Revisions of Existing Provisions

  • There’s an extension of the covered period to either 24 weeks after the loan origination or December 31, 2020, whichever is earlier. Previously, the covered period was eight weeks.
    • Please note: recipients who received a covered loan prior to the enactment of this law may use the original eight-week covered period.
  • The minimum maturity date of any loan with a remaining balance after loan forgiveness was amended from a two-year period to a five-year period.
  • The limitation on forgiveness based upon use of PPP funds was amended to be a minimum of 60% for payroll costs and 40% for non-payroll costs (rent, utilities, and mortgage interest).
    • Please note: the bill appears to state that you must have at least 60% of payroll costs to have loan forgiveness. Previously these terms were 75% of payroll costs and 25% of non-payroll costs.
  • Deferral of payroll tax payments is allowable even if a borrower would receive loan forgiveness on a covered loan. Previously this was disallowed once loan forgiveness was granted.

Introduction of New Provisions

Exemptions Based on Employee Availability

During the period of February 15, 2020 through December 31, 2020 a borrower may exempt a reduction in the full-time equivalent calculation if the borrower is able to document one of the following:

  1. An inability to rehire former employees who were employed as of February 15, 2020.
  2. An inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020.
  3. An inability to return to the same level of business activity as was operating prior to February 15, 2020 due to compliance with federal requirements during the period of March 1, 2020 through December 31, 2020 related to maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.

Repayment Requirement

There was an added provision requiring a borrower failing to apply for loan forgiveness within 10 months after the last day of the covered period to make payments of principal, interest and fees beginning on this date.

The bill is awaiting final approval by President Trump. Soon after his approval, formal guidance will become available. As further information develops, we will update our blog accordingly. Until then, please don’t hesitate to contact Cray Kaiser with any questions regarding the Paycheck Protection Program Flexibility Act of 2020.


These are certainly trying times and we want to reiterate that Cray Kaiser is here for you. As things continue to evolve in light of the COVID-19 pandemic, we at CK are taking additional precautions for the benefit of our team members and our clients.

Effective immediately:

  • No clients or guests will be allowed in our suite.
  • All in-person meetings are cancelled. Instead, we will be utilizing phone calls and/or email to communicate with our clients.
  • Our team members are being encouraged to work remotely. All staff are equipped with the appropriate technology and resources to continue to securely and confidentially serve you from home.
  • We will no longer have in-person drop offs of accounting/tax data. Instead, please drop off any packages outside the office door of our suite in the box provided.
  • All paper files, tax returns etc. will no longer be mailed by our office to you. We will be holding these items in our office to send to you at a later date.


We want to remind our clients of our portal access and your ability to safely and securely share your information with our team. We ask that you email efile@craykaiser.com to request your portal access. This will eliminate the need for you to drop off your tax information at our office.


Thank you for your patience and understanding during this challenging time. We wish you, your family, and your business health and safety. We will continue to support you as best as we can while keeping each other’s health a priority. If any changes occur during the course of the next few days, we will update our website.

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