Congress Approves PPP Flexibility Act – Makes PPP Loans More Flexible for Borrowers

  |   June 5, 2020

On June 3, Congress approved sweeping changes to the Paycheck Protection Program (PPP), and President Trump is expected to sign it into law—the PPP Flexibility Act. This new legislation triples the time allowed for small businesses and other PPP loan recipients to spend funds and still qualify for forgiveness of the loans.

Among the key provisions, current PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. New PPP borrowers will have a 24-week covered period, but it cannot extend beyond Dec. 31, 2020. This provision was included to enable more borrowers to reach full, or almost full, forgiveness.

In addition, the new threshold for the amount of PPP funds required to be spent on payroll costs to qualify for forgiveness is now 60% of the loan amount, instead of 75%. However, the 60% is now a cliff – borrowers must spend at least that percentage on payroll or none of the loan will be forgiven. Additionally, the Flexibility Act now allows PPP borrowers to delay payment of payroll taxes, even if all or a portion of the PPP loan is forgiven. Under the original CARES Act, PPP borrowers with forgiven loan amounts were ineligible for such deferral.

Learn more about the PPP Flexibility Act, here. Please contact REDW Principals James Ortiz or Christina Roderick to discuss any concerns you may have regarding your PPP loan, forgiveness calculations, or other PPP related issues.


REDW is committed to keeping you informed at all times, but especially during a crisis of the magnitude of the COVID-19 pandemic. Stay connected with us on LinkedIn and @REDWLLC. Or check out some of our other updates here.

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