PPPFA grants greater flexibility for PPP loan borrowers

Congress passed and President Trump signed the PPPFA (Paycheck Protection Program Flexibility Act), which grants greater flexibility for PPP loan borrowers.

Among its changes, the PPPFA

• Reduces the required ratio of loan usage on payroll from 75% to 60%
• Permits loan funds to be used over a 24- not 8-week covered period
• Extends the deadline to rehire workers from June 30 to December 31, 2020
• Adds exceptions to the headcount requirement for rehiring
• Extends the repayment term from 2 to 5 years

Many of the PPPFA’s changes are options available but not necessarily mandated for existing PPP loans. Companies that have taken out a PPP loan should contact their lender and tax/accounting professionals to learn which of the PPPFA’s options may now be available to them.