The Paycheck Protection Program (PPP) has been a lifeline for America’s small employers. Since the application process opened on April 3rd, the program has provided more than $510 billion in funding to approximately 4.4 million small employers across the country. Nearly two-thirds of all PPP loans are for $50,000 or less. Although not officially passed at the time of this writing, the Paycheck Protection Program Flexibility Act of 2020, bill H.R 7010, was introduced and passed by the House of Representatives last Friday with a 417 to 1 vote.  On June 3, by unanimous vote, the Senate passed the same bill as-is, meaning it will be directly sent to the White House where it will certainly be signed by the President.  The bill comes with some major modifications to the forgiveness guidelines, and although many of the open questions we have had continue to go unanswered, the changes make many of those items irrelevant. 

Some of the key takeaways from the bill are as follows:

  • Borrowers can extend their “covered period” from 8 weeks to 24 weeks, not to run past December 31, 2020.
    • If you have already spent the PPP funds in the 8 week period, the bill allows for you to keep the original 8 week covered period and go through the loan forgiveness process earlier. This only makes sense for those that have spent their PPP funds on qualified expenses and can get full forgiveness based on the original covered period.
  • The 75% of PPP proceeds to be used on payroll costs have been reduced to 60%, allowing more of the funds to be used to cover non-payroll costs (rent, utilities, interest on real and personal property, etc.). 
  • The deferral period for payments on any amount of the PPP loan not forgiven was extended from 6 months to 1 year. 
  • FTE rules will be eased, allowing for businesses with reduced headcounts the ability to seek full forgiveness if they meet some of the new guidelines in the bill. 
  • Two-year deferral of employer’s share of payroll taxes for all employers. The original deferral of the employer’s 6.2% of Social Security taxes was only until the loan was forgiven. The final bill will allow for all employers to keep deferring the 6.2% payroll tax regardless of when the loan is forgiven.

Although some questions remain unanswered, and new questions have arisen, it seems clear that a high percentage of businesses who received the PPP funds should be able to get them fully forgiven. Here is a link to the bill:

Details of this bill along with other items will be covered in our partnered webinar series, Forgiveness Friday IV, which will be next Friday, June 12th at 8 am.  You can register for the webinar below:

“Forgiveness Friday” Webinar Series – Part IV

The Paycheck Protection Program Loan Forgiveness Webinar

RP&B has teamed up with AmbroseAdvisors, AmPac Business Capital and Paychex to provide a free webinar series with the next webinar being Friday, June 12 at 8:00 A.M. PDT.

Free live webinar Friday, June 12 at 8:00 A.M. PDT


Feel free to share with a friend. We look forward to seeing you there.

There are certain to be more updates and changes. You can always click here for more COVID-19 resources relating to the above information as we will do our best to keep it updated with information we think is useful.