Congress passed the PPP Flexibility Act on June 5, 2020, which brought with it numerous changes to PPP loans, many of which are beneficial for small businesses.
Now, only 60% of your total loan amount needs to be used for payroll costs, with no more than 40% of your loan being used for non-payroll expenses listed above.
PPP borrowers with loans approved prior to June 5, 2020, may now choose to use a covered period of either 8 weeks OR 24 weeks, as stated above.
PPP loans approved on or after June 5, 2020, now have a covered period of 24 weeks as stated above.
PPP borrowers with loans approved prior to June 5, 2020, now have the option of changing the term on the unforgiven portion of their loan as agreed upon with the lender from the current two-year term, to a five-year term. No changes to the loan term need to be made unless borrowers have applied for forgiveness of their PPP loan.
PPP loans approved on or after June 5, 2020, have a default term of 5 years for any unforgiven amount of the loan.
As of October 8, 2020 the U.S. Small Business Administration (SBA) in collaboration with the Treasury Department released a new PPP forgiveness application (3508S). This application is for those PPP borrowers with a loan amount of $50,000 or less. New interim final rules for this specific application have been created to explain the changes being implemented.