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The U.S Senate passed the House version of the Payroll Protection Program Flexibility Act Wednesday night and sent to the President for signature. The following is a summary of the highlights of the legislation:
- Extends 8 week “covered period” to 24 weeks or December 31, 2020 (whichever comes first).
- Reduces the current threshold of required use on payroll from 75% to 60% for maximum forgiveness, thereby increasing nonpayroll expenses, such as rent, mortgage interest and utilities, from 25% to 40% of the total loan proceeds spent.
- Extend loan term on unforgiven amounts from 2 years to 5 years.
- As the House Bill is currently written, there are concerns that it could be interpreted that businesses would not be allowed partial forgiveness if they spend less than the 60% of loan on payroll. Senators Rubio and Collins have indicated they will seek a technical correction to the legislation however they viewed the urgency of the passing of the bill of greater importance.
- Extends the rehire date of employees from June 30, 2020 to December 31, 2020
Assistance and Guidance from Freed Maxick
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