Late last week, the president signed into law the Paycheck Protection Program Flexibility Act, which relaxes some of the original PPP rules for loan forgiveness and rehiring timelines, the percentage of forgiven loan amounts that come from payroll expenses, and other factors.

The new legislation:

• Extends the PPP loan forgiveness period to include costs incurred over 24 weeks after the loan is issued (or through Dec. 31, 2020 – whichever comes first). Those businesses that received a loan prior to passage of this bill can choose to keep the 8-week forgiveness window under the original program structure.
• Extends from June 30, 2020 to Dec. 31, 2020 the date by which businesses must restore staffing or salary levels previously reduced in order to have the full loan amount forgiven. This provision applies to worker and wage reductions made from Feb. 15 through 30 days after enactment of the CARES Act (March 27, 2020).
• Allows forgiveness amounts to be maintained for companies that can document their inability to rehire workers employed who were employed as of February 15 or their inability to find similarly qualified workers by the end of the year. Likewise, forgiveness amounts can be maintained if business can show that they could not resume business levels from before February 15 because they were following federal requirements for sanitization or social distancing.
• Extends the deadline to apply for a PPP loan from June 30, 2020 to Dec. 31, 2020.
• Lowers the required percentage of forgiven loan amounts that come from payroll expenses from 75% to 60%.
• Repeals a provision from the CARES Act that barred companies with forgiven PPP loans from deferring their payroll tax payments.
• Allows borrowers to defer principal and interest payments on PPP loans until the SBA compensates lenders for any forgiven amounts (rather than the previous 6-month deferral period). Borrowers that don’t apply for forgiveness would be given at least 10 months after the program expires to start making payments.
• Changes from two years to five years the minimum loan maturity period following an application for forgiveness (this only applies to PPP loans issued after enactment of this bill, though borrowers and lenders can agree to extend current loans).

Access the PPP loan forgiveness application here. To learn more about the latest PPP changes, register for the “Reignite Your Business: PPP Loan Procedures” webinar on Thursday, June 18 at 2:00 ET.

Katie Butler is the senior vice president of the Society of American Florists.