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

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.

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Effective immediately:

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MOVING FORWARD

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