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On Wednesday, June 3, the Senate passed the PPP Flexibility Act of 2020, which would give employers that receive forgivable loans more time and flexibility under the Small Business Administration’s Paycheck Protection Program. The bipartisan measure was easily approved last week in the House and is expected to be signed into law by the President. Here are the key highlights to know.

More time to spend the money. Under the new law, employers would have up to 24 weeks or, until December 31, 2020, whichever is earlier (“covered period”) to spend the loan money and have the loans forgiven, up from eight weeks previously provided under the PPP. Current borrowers may still elect the original 8-week period and the attendant obligation to maintain payroll levels only through June 30, 2020.

Lower payroll requirement. As it stood, to have their loans forgiven, employers were required to spend 75% of the loan money on payroll with the rest available for certain expenses like commercial rent and utilities. The new law would lower the payroll expenditure threshold from 75% to 60%.

New forgiveness exemption. Borrowers may achieve full PPP loan forgiveness even if they don’t fully restore their workforce if they can show 1) the inability to rehire individuals who were employees on February 15, 2020, and the inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020, or, 2) inability to return to the same level of business activity at which the employer operated at or before February 15, 2020, due to Covid-19 related operating restrictions.

New five-year maturity date. New borrowers would have five years to repay the loan instead of two. Current borrowers and lenders may mutually agree to extend the loan to five years.

Delayed payment of payroll taxes. The new law would allow borrowers to delay the payment of employer payroll taxes, which was previously prohibited under the CARES Act if their loans were forgiven in whole or in part.

The program’s implementation and eligibility rules are evolving. And, further changes and clarifications may be in the pipes. The soon-to-be enacted changes, however, provide much-needed flexibility and relief to small businesses, and employers that have not yet applied for the program may wish to reassess their loan forgiveness eligibility.

We continue to closely monitor the situation and update this information to provide the latest workplace and legal developments related to Covid-19. We expect your questions and our answers will change as the situation develops. For answers to your specific questions and for the newest developments, please visit our website at and contact us at Donnelly + Gross at 352-374-4001 or directly by email:

Paul Donnelly
Laura Gross
Jung Yoon
Jim Brantley
Cole Barnett

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*This publication is for general information only and intended for clients and friends of Donnelly + Gross. It should not be relied upon as legal advice as the law related to each situation varies. Moreover, workplace law related to Covid19 is dynamic and changing daily. The sharing of this information does not establish a client relationship.