Changes to the Paycheck Protection Program (PPP) arrived recently with the passage of the “Paycheck Protection Flexibility Act.” According the Journal of Accountancy, among the bill’s key provisions is a change in the “threshold for the amount of PPP funds required to be spent on payroll costs to qualify for forgiveness to 60% of the loan amount.” Other key changes, per the American Institute of Certified Public Accountants:
- PPP borrowers may extend the eight-week loan period to 24 weeks.
- Borrowers can use the 24-week period to “restore their workforce levels and wages” to pre-COVID outbreak levels to achieve full forgiveness. Borrowers must accomplish this by Dec. 31, a change from the previous deadline of June 30.
- The new bill allows for two new exceptions for borrowers to attain full PPP forgiveness, even if their labor force is not fully restored.
The PPP, established as part of the CARES Act to relieve small businesses affected by the COVID-19 pandemic, was launched in early April with nearly $350 billion in funding that was snapped up in roughly two weeks. Congress allotted an additional $310 billion in funding on April 21.