H.R. 7010, Paycheck Protection Program Flexibility Act of 2020 Passes in the House
On May 28th The House passed the Paycheck Protection Program Flexibility Act of 2020 with nearly a unanimous vote of 417-1. The official text of the Bill H.R. 7010 is posted here
The bill is intended to make the terms of use for the PPP funds more flexible, as many businesses are still prohibited from opening and many employees are reluctant to return to their workplace. This expansion is NOT in keeping with the intent of the Paycheck Protection Program as designated under the C.A.R.E.S. act which was aimed at getting furloughed employees off the unemployment roles.
There are several differences in terms and allowances between this bill and the proposals included in last week’s Senate bill.
Here is a link to the CNN article which lists some key points that will have to be agreed upon by both houses before the bill is finalized and signed into law.
- The minimum loan maturity may be increased from the original 2 year maturity
- The Covered period for applying for loans could be extended; currently, the covered period for applying for loans ends June 30, 2020.
- The 8-week covered period for spending loan funds could be extended from the date loan was funded to allow more time to use and to start using the funds (possibly 16-24 weeks)
- The safe-harbor or rehire provisions could be extended to allow for re-hires as businesses reopen, possibly through December
- The 75% for payroll purposes rule could be modified to a lower per-cent which would make it easier for businesses to gain full forgiveness.
- The Bill restores eligibility of a borrower to get employer payroll tax deferral regardless of their PPP Loan forgiveness.
There is no indication for when the Senate will vote on this bill. Hopefully, soon so the President can sign it into law and borrowers whose covered periods are about to expire can make decisions based on these provisions.
As always we will keep you posted on these and other developments as we learn of them.
Best wishes to you, your family and friends for health and safety through these trying times.