June 04, 2020 | Posted in:

Paycheck Protection Program Flexibility Act: New PPP Changes Approved by House and Senate

PPP Changes Coming for Borrowers: What You Need to Know

[Update: President Trump signed the Paycheck Protection Flexibility Act into law as of June 5, 2020.]

Last night, the U.S. Senate approved the Paycheck Protection Program Flexibility Act, an overhaul of the PPP forgiveness criteria, which was passed by the House of Representatives on May 28. It was made official and signed into law by President Trump on June 5, 2020. Below are the key highlights:


Paycheck Protection Program Flexibility Act


  • Borrowers can opt to extend the eight-week period to 24-weeks.
  • Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1.0%.
  • To calculate forgiveness, the payroll portion of expenses is reduced from 75% to 60% of the loan proceeds. However, that 60% is now a “cliff,” meaning that borrowers must spend at least 60% on payroll or none of the loan proceeds will be forgiven. This gives borrowers greater flexibility if they need to allocate more funds towards eligible overhead expenses (rent, interest, utilities). Edit: The SBA and Treasury clarified that partial loan forgiveness will also be available under the 60% threshold.
  • The deadline to restore workforce wages and number of FTEs to pre-pandemic levels has been moved from June 30 to December 31, 2020.
  • Exceptions in the full forgiveness calculation are now allowed if borrowers are unable to restore their workforce due to COVID-19 related operating restrictions OR if they cannot find qualified employees to hire or re-hire. Previous guidance indicates that borrowers can also exclude from calculations employees who turned down good-faith offers to be rehired.
  • PPP borrowers can now also defer payment of the employer social security taxes for two years. Originally, PPP borrowers could only defer payment until the point their loan was forgiven.

Key Highlights of Paycheck Protection Program Flexibility Act

Contact us

Throughout the PPP process, you should be in contact with your lender and your CPA. If you have any questions or concerns, Alloy Silverstein’s accountants and advisors are here to help. Contact us at (856)667-4100 or by email at

See also:

COVID-19 Resource Center from Alloy Silverstein CPA Firm Accountants and Advisors NJ



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