As several small businesses looked to the Small Business Administration and Federal Government to work through financial losses during the Coronavirus pandemic, many took out Paycheck Protection Program (PPP) loans.
In a House Bill passed by the Senate, there have been modifications to the Paycheck Protection Program Flexibility Act, which will have an impact on those who received the loans, according to the Journal of Accountancy.
Key provisions of the PPP Flexibility (PPPF) Act as passed will impact the following:
- Extends the covered period from eight weeks to 24 weeks.
- Changes payroll/non-payroll limits from 75%/25% to 60%/40%.
- Extends the loan maturity from two years to five years.
- Extends “safe harbor” to rehire employees from June 30 to Dec. 31, 2020.
- Allows businesses to receive full benefit of payroll tax deferments if participating in PPP.
- Removes limits on loan forgiveness for small businesses that were unable to rehire employees, hire new employees or return to the same level of business activity as before the virus.
- Allows small businesses to take a PPP loan and also qualify for a separate, recently enacted tax credit to defer payroll taxes. This was previously prohibited, according to the Philadelphia Business Journal.
The bill now moves to the president, who is expected to sign it into law.