House Passes Bill Amending PPP Program
May 28, 2020, the House of Representatives near-unanimously (417-1) passed HR 7010, the Paycheck Protection Program Flexibility Act. It is uncertain if the Senate will pass these measures, though there are clear indications of bipartisan support to relax the current terms of the PPP loan program.
Here are the key changes proposed in this bill:
- Extend the loan application deadline from June 30 to December 31, 2020.
- For new loans, the minimum loan term would be 5 years instead of the current 2-year term. For loans already made, banks and customers could agree to extend the term to 5 years.
- Reduce the requirement that payroll costs must make up at least 75% of the loan forgiveness to 60%.
- Extend the 8-week period in which costs incurred and paid can be forgiven to 24 weeks or December 31, 2020, whichever is earlier.
- Extend the initial deferral period (months during which no payments are due) from 6 months to 10 months.
- Changes are proposed to the calculation that lowers the amount of loan forgiveness stemming from a reduction in full-time equivalent employees (FTEs) ... READ MORE