This article has been updated with the most current information from the SBA as of June 11, 2020.
On June 5, 2020, H.R.7010 was signed into law modifying the Paycheck Protection Program (PPP) and making loan forgiveness more accessible for business owners. The Paycheck Protection Program Flexibility Act (PPPFA) amends sections of the original Small Business Act and the CARES Act including covered period extensions, employee availability, minimum loan terms, and deferral payments.
As of Monday, June 8, 2020, a joint statement from SBA Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin was released announcing the SBA and Treasury will soon issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application reflecting the amendment outlined in the PPP Flexibility Act.
On June 11, 2020, revisions to the PPP interim final rules were released to clarify certain provisions in the PPP Flexibility Act. The most noteworthy clarification in the interim final rule made it clear that businesses that spend under the 60 percent threshold on payroll costs may still be eligible for partial loan forgiveness—the 60 percent was not intended to be a cliff. Further, June 30, 2020 is still the last day for PPP loans to be approved.
Here, we have outlined the changes and how they may impact loan forgiveness.