H.R.7010 – Paycheck Protection Program Flexibility Act of 2020
Here are some highlights
1. Extension of “covered period” is now 24 weeks from the date of the loan’s origination, or December 31, 2020, whichever comes earlier. *Optional extension
2. You can spend up to 40% of your proceeds on certain non-payroll costs, BUT if you do spend this 40% on non-payroll you must spend 60% on payroll in order to be eligible for full forgiveness.
3. You’ll have longer to replace FTEs/restore salaries. As long as the FTEs or salary/hourly wage are restored any time prior to the end of 2020, no reduction in forgiveness will be required.
4. You’ll have longer to repay any loan proceeds that are not forgiven, BUT you will need to work this out with the lender as this may not be automatic.
5. Businesses that remain partially or fully closed through the end of the year will get new relief.
6. You can now defer certain payroll taxes even if you received a PPP loan.
7. The US Treasury Can Still Screw It Up! Tony Nitti summed it up best by saying: “I’m not sure what type of wiggle room they’ll have given the statutory language, but when you consider that the SBA pretty much took a blowtorch to the legislative text of the CARES Act, I guess anything is possible.”
“PPP loan applications must be approved by June 30, so if you’re serious about securing a potentially forgivable loan for your business, do it now”