Earlier this month, Congress passed and the president signed H.R. 7010, the Paycheck Protection Program Flexibility Act, expanding the “covered period” (see yesterday’s post for details) from eight to 24 weeks. In other words, thanks to the modifications in H.R. 7010, employers now have an extra 16 weeks in which to spend their PPP loan funds. Fortunately, though, businesses are not required to wait the remaining 16 weeks to apply for forgiveness if they would rather do so after the initial eight.
The legislation also reduced the percentage of loan funds required to be used for payroll from 75 percent to 60 percent. PIA National had lobbied for the payroll percentage requirement to be eliminated entirely, but the reduction is still an improvement and will allow businesses to make better use of the funds. That said, we will continue to advocate for an expansion on the qualifying uses of these funds, because we know that small business owners need them for personal protective equipment (PPE) and expenses that arose due to unexpected and unprecedented levels of remote working, among other needs.
Finally, thanks to this new law, borrowers have until the end of the year to restore their payroll to pre-Feb. 15 levels. That deadline was previously June 30. This will provide businesses with much-needed flexibility as they attempt to scale their payrolls back up, especially as they adjust to different and geographically-dependent phases of reopening, which could result in businesses not resuming full operation until well after June 30.
PIA National will continue to work with members of Congress to further improve the PPP and will engage with the Small Business Administration as needed to offer feedback on the regulations this new law is expected to prompt.