House Passes Paycheck Protection Flexibility Act of 2020
As expected, the House passed H.R. 7010, their Paycheck Protection Program Flexibility Act of 2020 yesterday. The Senate is expected to address its own PPP amendments bill when it returns from recess next week. If the bills the House and Senate pass are different, they will have to be reconciled. We will continue to keep you informed on the progress of each of these proposals.
Provisions of the H.R. 7010 include:
• Extending the PPP loan forgiveness period to include costs incurred over 24 weeks after a loan is issued or through Dec. 31, 2020, whichever comes first.
• Extending the period where a loan could be forgiven from December 31, 2020, from the current June 30, 2020, if businesses restore staffing or salary levels that were previously reduced. The provision would apply to worker and wage reductions made from February 15 through the end of April.
• Allowing companies that document their inability to rehire workers employed as of February 15, 2020, as well as their inability to find similarly qualified workers by the end of the year to remain qualified for loan forgiveness.
• Extending the deadline to apply for a PPP loan from June 30. 2020 to December 31, 2020.
• Changing the current 75%/25% requirement of payroll to mortgage/rent/utilities expenses to 60%/40%.
• Repealing a provision from the CARES Act that barred companies with forgiven PPP loans from deferring their payroll tax payments.
• Allowing borrowers to defer principal and interest payments on PPP loans until the SBA compensates lenders for any forgiven amounts, instead of the current six-month deferral period. Borrowers that don’t apply for forgiveness would be given at least 10 months after the program expires to start making payments.
• Establishing a minimum loan maturity period of five years following an application for loan forgiveness, instead of the current two-year deadline set by the SBA. That provision would apply to PPP loans issued after the measure is enacted, though borrowers and lenders could agree to extend current loans.
Source: National Association of Professional Employer Organizations (NAPEO)