New Act Provides More Flexibility to Businesses or Nonprofits with PPP Loans

The new Paycheck Protection Program (PPP) Flexibility Act, passed by the House of Representatives and the Senate, now is on its way to the President’s desk for his signature. The new PPP Flexibility Act amends the PPP as follows:

  • Companies now may apply for PPP loans through December 31st (vs. June 30th) or until the money runs out.
  • Borrowers now have 24 weeks or until December 31st, whichever is earlier, to spend PPP loan funds (was eight-weeks). Or they can elect to continue using the eight-week period.
  • The 25% limit on nonpayroll expenses qualifying for loan forgiveness is increased to 40%. Borrowers must use at least 60% of the PPP loan funds for payroll costs to qualify for any forgiveness but this may be subject to change.
  • Borrowers now have until December 31st (was June 30th) to rehire employees and/or restore salary or wages to avoid a reduction in loan forgiveness.
  • Borrowers that are unable to rehire employees that were laid off or furloughed or hire a replacement, or are unable to return to the same level of business due to COVID-19-related orders or circumstances and can document such, can qualify for FTE “safe harbor.”
  • All new PPP loans made going forward will have a five-year maturity and lenders are able to extend maturity for existing PPP loans at their discretion.
  • Borrowers now can defer 6.2% OASDI (employer payroll) taxes even if they receive PPP loan forgiveness.
  • Interest and principal payments can be delayed until either the lender receives payment of the forgiveness amount from the SBA or 10-months after the end of the 24-week period, whichever is earlier.


Contact WBL today to discuss your PPP Flexibility Act and forgiveness questions. Check out WBL’s COVID-19 Business Support page for more resources including blog posts, presentations, webinar recordings and links to SBA publications.

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