28 May House Passes PPP Flexibility Bill
Today, the House passed HR 7010 which provides several changes to the PPP loan program. The Senate still must vote on this legislation, which will likely take place next week and may result in changes to the provisions. Some highlights from last night’s version of HR 7010 are below:
- Extends 8-week covered period to 24-weeks
- Changes the 75% payroll costs / 25% nonpayroll costs rule to 60% payroll costs / 40% nonpayroll costs
- Replaces the 6/30/20 safe harbor date with 12/31/20
- Expands exemption from FTE reduction if a borrower:
- Is able to document an inability to rehire individuals or similarly qualified employees, or
- Is able to document an inability to return to the same level of business activity due to compliance requirements from various organizations as a result of the COVID-19 pandemic
- Allows borrowers to continue to defer employer share of social security taxes even after receiving loan forgiveness
- Adjusts the deferral period of the loan from 6-months to a timeframe tied to when the borrower obtains forgiveness, or 10 months after the covered period
- Provides 5-year loan maturity date for new loans. Terms of existing loans are allowed to be changed by lenders, but not required.
We will continue to monitor this legislation for changes and updates.