House Passes Bill Easing PPP Forgiveness

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By a vote of 417-1 the U.S. House of Representatives has passed the Paycheck Protection Flexibility Act (H.R. 7010), legislation designed to make it easier for PPP loan recipients to qualify for forgiveness. If enacted into law the bill would:

Reduce the amount of the PPP loan required to be spent on payroll from 75% to 60%
Allow up to 40% of loan proceeds to be spent on qualifying expenses (including rent, utilities, and mortgage interest)
Extend the window businesses have to use the funds from eight weeks to 24 weeks
Push back the June 30 deadline to rehire workers to December 31, 2020
Provide more leeway on loan forgiveness for business owners who show they could not rehire workers or reopen due to safety standards
Extend the time recipients have to repay the loan from two years to five years
Let companies that get loan forgiveness defer payroll taxes

A Senate version of the bill, as currently formatted, would double the time allowed to spend PPP funds from 8 weeks to 16 weeks but retain the requirement that 75% of the funds be used for payroll.

The action in both houses of Congress is in response to new PPP forgiveness guidelines issued by the SBA, which tighten rules and restrictions for how PPP loan proceeds may be forgiven.

If you have any questions about the PPP loan program, please contact Gray, Gray & Gray at (781) 407-0300.

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