This evening, the U.S. Senate passed H.R. 7010, the Paycheck Protection Flexibility Act, making a number of retroactive improvements to the Paycheck Protection Program. Components of the legislation include the following:
- Extends the loan coverage period from 8 weeks to 24 weeks;
- Modifies the “75/25” rule, which had required recipients of the funds to use 75% of the money for payroll costs and to limit other costs to no more than 25% in order to be eligible for loan forgiveness. The new ratio is 60%/40% respectively.
- Asserts that loan forgiveness still possible if FTEs won’t come back or if revenue in December is below Feb 2020 levels;
- Five-year loan-repayment terms for future PPP loans; and
- Payroll tax deferment restored.
The National Restaurant Association has provided an analysis for how the bill would change PPP for current users, and that document can be found here.