Congress Approves PPP Loan Changes

UPDATE:President Trump on Friday, June 5, signed the bill, approved by the Senate earlier this week.

The Senate passed the Paycheck Protection Flexibility Act on Wednesday tripling the time allotted for small businesses and other PPP loan recipients to spend funds and still qualify for forgiveness of the loans.

Following is a summary of the legislation’s main points compiled by the AICPA: 

  • PPP borrowers can choose to extend the eight-week period to 24 weeks or keep the original eight-week period. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
  • The payroll expenditure requirement drops to 60% from 75% but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven.
  • Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.
  • The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce:
  • The forgiveness amount will not be reduced if an employer can document an inability to rehire employees by the end of 2020.
  • The amount forgiven may not be reduced if the borrower can show an inability to restore business operations to Feb. 15, 2020, levels due to Covid-19 related operating restrictions.
  • Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.
  • The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.

More guidance is expected, and the forgiveness application will change. We advise borrowers to wait to apply for forgiveness until additional guidance is received. We will continue to monitor developments and keep you informed of any changes.

If you have questions about the PPP loan forgiveness process, HORNE is here to help. Click the button below to sign up for HORNE’s Forgiveness Assistance Program or contact us at

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