The Paycheck Protection Flexibility Act is Ready for the President's Signature
Thursday, June 4, 2020
Today, the Senate unanimously voted for H.R. 7010, passed by the House on May 28th. The bill, awaiting President Trump's signature, provides much needed time and flexibility for the Paycheck Protection Program participants.
The bill includes the following provisions:
- Extends the forgivable covered loan period to 24 weeks (from 8 weeks) after the date of the loan origination (or until December 31, 2020);
- Extends the covered loan period to December 31, 2020 (from June 30th), which means funds can be used through the earlier of December 31st or 24 weeks;
- Extends the maturity date for loans to 5 years (from 2 years);
- Extends the rehiring deadline to December 31, 2020 (from June 30th);
- Lowers the requirement that 75% of the loan be used for payroll costs to 60% to qualify for loan forgiveness;
- Allows businesses with forgiven loans to defer payroll taxes; and,
- Forgivable portion of the loan will no longer be determined by a proportional reduction in the number of full-time equivalent employees if the borrower can demonstrate that, in good faith, they are unable to:
- Rehire people who were previously employed or unable to rehire similarly qualified employees;
- Return to the same level of business activity as before February 15, 2020, due to compliance with Coronavirus requirements.
Buckley King attorneys Frank Nagorney and Brent Buckley are monitoring the legislative and SBA developments, and are available to answer your questions.
Disclaimer: This advisory is educational in nature and not intended to be legal advice.