The U.S. Congress has passed, and President Trump has signed, a law to reform the Paycheck Protection Program (PPP) set up to assist businesses affected by COVID-19.
The new Paycheck Protection Program Flexibility Act gives business owners more time to use emergency funding received under the PPP. It extends the period in which employers must use the money to qualify for loan forgiveness from eight weeks to 24 weeks.
It also gives small businesses more flexibility by changing the so-called 75/25 rule that requires employers to use 75% of funds received for payroll, while limiting other costs to no more than 25% to qualify for PPP loan forgiveness.
The amended ratio would be at least 60% of funds going toward payroll and no more than 40% going toward other costs.
We encourage you to share this PPP change with your small business clients.
Watch for other updates concerning COVID-19 on our COVID-19 microsite.