Paycheck Protection Program Flexibility Act (PPPFA)

The recently-passed Paycheck Protection Program Flexibility Act (PPPFA) includes many revisions to the regulations of the Paycheck Protection Program . Many of these changes will benefit those unable to open due to government regulations and restrictions such as the hospitality industry, construction, healthcare practices and many more.  The bill’s highlights include:
  • Covered period of a PPP loan has been amended to the earlier of a 24 week period, beginning on the date of origination of the PPP loan or December 31, 2020.
  • Borrowers who received PPP loans prior to the PPPFA have the option to choose an 8 week Covered Period or a 24 week Covered Period
  • Non-payroll costs (rent, mortgage interest and utilities) were previously restricted to 25% of loan proceeds. The limitation has been increased to 40%.
  • Those participating in loan forgiveness now can defer employer payroll taxes.
  • Changes involving the portion of the loan that is not forgiven:
  • Repayments previously scheduled to start 6 months after loan commencement will now begin 10 months following the end of the covered period.
  • PPP loans originating on or after the date of the PPPFA shall have the term of the loan revised from a 2-year term to a minimum of a 5-year term, up to a 10-year term.
  • PPP loans that originated prior to the passing of the PPPFA are governed by a 2-year term; however, lenders and borrowers could adopt the updated term length.
  • During the period February 15, 2020 to December 31, 2020, loan forgiveness will be exempt from a reduction in the number of full-time equivalent employees if the borrower, in good faith, is able to document the inability to:
  • Rehire individuals who were employees on 2/15/2020
  • Hire similarly qualified employees for unfilled positions before 12/31/2020
  • Return to the same level of business activity prior to 2/15/2020 due to COVID-19
The constant changes in legislation and guidance has left many businesses with questions and concerns on how to maximize the forgiveness of your loan. We are committed to helping you achieve this goal and will keep you informed as the Treasury Department issues its guidance on these changes.  Please reach out to our firm with any additio nal questions.  

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