Last week, the U.S. Congress passed and President Trump signed a Paycheck Protection Program (PPP) reform bill.

The Paycheck Protection Program Flexibility Act gives business owners more time to use emergency funding received under the PPP set up to assist businesses affected by COVID-19. 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 increased flexibility by changing the rule requiring employers to use 75% of the money for payroll, while limiting other costs to no more than 25% to qualify for loan forgiveness. The amended ratio is at least 60% of funds going toward payroll and no more than 40% going toward other costs.

Equally important, the new legislation pushes back a June 30 deadline to rehire workers in order for salaries to count toward loan forgiveness. Businesses now have until December 31, 2020, to rehire workers.

The SBA is expected to provide formal notice of the changes to funded businesses in the near future. More information will soon be posted on the SBA website.

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