On June 5, the President signed the Paycheck Protection Program Flexibility Act. This legislation makes some important positive changes to the Paycheck Protection Program:
- It extends the time period to use PPP loan funds and still qualify for loan forgiveness from 8 to 24 weeks.
- It reduces the amount of PPP loan funds that must be spent on payroll from 75% to 60% – i.e., it permits spending a greater percentage of proceeds on rent and other approved non-payroll expense while remaining qualified for loan forgiveness.
- It extends the loan repayment period from 2 years to as many as 5 years for borrowers who do not qualify for loan forgiveness.