Washington, DC – On June 5, 2020, President Trump signed the Paycheck Protection Program Flexibility Act into law following bipartisan passage through the House and Senate.
This package will better help businesses address economic challenges stemming from the COVID-19 outbreak while remaining eligible for loan forgiveness from the Small Business Administration (SBA). The American Bakers Association (ABA) commends Congress and President Trump for working together in crafting these reforms.
The new law lowers the threshold of loan funds that must be spent on payroll costs from 75% to 60%, and also extends the timeframe to use funds from 8 weeks to 24 weeks.
Among other modifications, the bill would also establish that:
- Paycheck Protection Program (PPP) loans have a minimum maturity of five years,
- Participants now also have access to payroll tax deferment,
- The rehiring deadline is now extended until December 31,
- Borrowers may defer payments up to 10 months after the loan origination date.
ABA’s Support & Relief Hub will continue to update guidance and program rules as the SBA releases new information pertaining to these changes.