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Paycheck Protection Program Flexibility Act Amended

Paycheck Protection Program

1.5 minute read

President Trump recently signed a bill which amended the Paycheck Protection Program (PPP) Flexibility Act. It provides borrowers with more flexibility to spend PPP funds without compromising forgiveness eligibility. The PPP is part of the Coronavirus Aid, Relief and Economic Security Act.

The bill makes the following amendments:

  • Extension of rehiring safe harbor – The rehiring safe harbor has been extended six months to December 31, 2020. This gives borrowers extra time to rehire employees or restore payroll levels without facing a reduction in the amount of forgiveness in which they are eligible.
  • Payroll tax deferment – Borrowers can still be eligible for loan forgiveness even if they defer payroll taxes without being penalized.
  • Payroll costs vs. nonpayroll cost – The portion of PPP funds that need to be spent on payroll costs has decreased to 60%. The nonpayroll cost limitation has increased to 40%.
  • Loan repayment terms – The minimum loan term for unforgiven PPP loans extends from two to five years.
  • Covered period extension – The covered period during which borrowers must spend the PPP funds to be eligible for forgiveness has been extended from 8 to 24 weeks (from the origination date of the loan).

The bill also provides loan forgiveness eligibility for those who are unable to return to the same level of business due to COVID-19 and for those that can’t rehire an employee or a replacement.

Download the bulletin for more details.

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This blog is intended to be a compilation of information and resources pulled from federal, state and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.


National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Ken Zastrow

Ken Zastrow

Ken Zastrow enjoys establishing a strong rapport with his clients. He believes that education is key in helping them understand their benefit plans. Ken has a strong background in underwriting and post-employment benefits. As Employee Benefits Consultant at National Insurance Services, Ken is responsible for the overall assessment and management of all an employer’s benefit plans including claim reconciliation, policy changes, renewals, and medical and dental analytics. He is also well versed in compliance, benefit integration, and early retiree benefits. Ken is a licensed insurance agent (Health, Life, Series 6 and Series 63) as well as a registered financial representative with GWN Securities. He works with schools, cities, and counties in Wisconsin.