{ Banner Image }

New Law Modifies Paycheck Protection Program Rules

An McV Emergency Task Force Alert

Today President Donald Trump signed into law H.R. 7010, also known as the Paycheck Protection Program Flexibility Act (PPPFA), to modify certain aspects of the Paycheck Protection Program (“PPP”) created under the CARES Act

The key changes are the following:

  1. Reduces the percentage of the PPP loan that can be used to cover payroll costs from 75% to 60%;
  2. Extends the period to use the funds to be eligible for PPP loan forgiveness from 8 weeks to 24 weeks;
  3. Modifies the deadline to rehire workers to be eligible for PPP loan forgiveness from June 30, 2020 to December 31, 2020;
  4. Extends the repayment term of the remaining balance of the PPP loan from 2 years to 5 years;
  5. Creates additional exemptions from the forgiveness reduction calculation if  the recipient is:
    • unable to rehire former employees,
    • unable to hire similarly qualified employees, or
    • unable to return to the same level of business activity due to compliance with federal requirements or guidance related to COVID-19; and
  6. Defers the repayment of the remaining balance of the PPP loan until the SBA remits the forgiveness amount to the lender.

It is expected that the SBA and the U.S. Treasury Department will issue guidelines and Q&As to conform the PPP pursuant to the PPPFA. We will continue to monitor developments and keep you informed.

The content of this McV Alert has been prepared for information purposes only. It is not intended as, and does not constitute, either legal advice or solicitation of any prospective client. An attorney-client relationship with McConnell Valdés LLC cannot be formed by reading or responding to this McV Alert. Such a relationship may be formed only by express agreement with McConnell Valdés LLC.

Jump to Page
Our Offices

The Site uses cookies to distinguish you from other users of the Site. This helps McV to provide you with a good experience when you browse the Site and to improve the Site. By using this site, you agree to our updated Privacy Policy and our Terms of Use.