Today, the Paycheck Protection Program Flexibility Act was signed into law, providing small businesses with more time and more flexibility to use their Paycheck Protection Program (PPP) loans. The new law:
- Increases the amount that can be used on rent, utilities, and other overhead costs from 25 percent to 40 percent; and it lowers the amount that must be used on payroll costs from 75 percent to 60 percent;
- Extends the period of time that small businesses can use their loan from 8 weeks to 24 weeks and extends the entire program to December 31, 2020;
- Allows small businesses to receive loan forgiveness even if they had trouble rehiring employees or if they have not been able to return to a full operating status;
- Allows small businesses to repay any amount that is not forgiven over five years, instead of just two years; and
- Allows small businesses with PPP loans to defer their payroll taxes as provided in the CARES Act.
The Paycheck Protection Program provides small businesses – including restaurants, hotels, and non-profits – with zero-fee loans of up to $10 million to cover payroll and other operating expenses. For more information on the PPP, visit www.schatz.senate.gov/coronavirus/small-businesses/sba-paycheck-protection-loan-program