The Paycheck Protection Program Flexibility Act of 2020 provides borrowers with greater flexibility in spending PPP funds without compromising eligibility for forgiveness.

Amendments include:

1. Extending the minimum loan term for unforgiving PPP loans to 5 years (originally 2)

2. Reducing the portion of PPP funds that must be spend on payroll costs to 60% (originally 75%) and raising the nonpayroll cost limitation to 40% (originally 25%)

3. Extending the covered period during which borrowers must spend the PPP funds to be eligible for forgiveness to 24 weeks from the date of origination of the loan (originally 8 weeks)

4. Permitting borrowers to defer payroll taxes without being penalized while still remaining eligible for loan forgiveness

5. Extending the rehire safe harbor by 6 months to provide borrowers with additional time to restore payroll levels or rehire employees without facing a reduction in the amount of forgiveness for which they are eligible. (Original date was 6/30/2020; new date is 12/31/2020.)

Make sure to speak to your lender if you have any questions about how this new bill may impact your loan.