President Trump has signed into law the Paycheck Protection Program Flexibility Act. This law will:
- Relax rules under the Paycheck Protection Program to give borrowers up to 24 weeks instead of 8 weeks to spend the funds;
- Give borrowers more flexibility in how the money is spent by reducing the amount of the loan required to be used on payroll expenses from 75% to 60% and still be eligible for loan forgiveness;
- Extend the minimum loan repayment term from 2 years to 5 years for loans that are not forgiven;
- Allow borrowers to defer payroll taxes without penalty and still be eligible for loan forgiveness; and extend the rehiring safe harbor to from June 30, 2020 to December 31, 2020.
We will update this information as we receive formal guidance and updates in the coming weeks.