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Updated: Sep 1, 2020

The Senate passed the PPP Flexibility Act yesterday sending it over to the President for his signature. It’s almost a done deal.

This will allow organizations who have received PPP funds greater flexibility on loan forgiveness and most organizations with employees will be able to maximize the loan forgiveness.

There are 5 key items within the bill to highlight:

  • The forgivable percentage needed to be spent on payroll costs is reduced from 75% to 60%. This allows businesses greater flexibility to spend on the other forgivable expenses (rent, utilities, loan interest).

  • Extends the loan forgiveness window from 8 weeks to 24 weeks. That’s 4 months added to the loan forgiveness window! This would allow most businesses to have the majority of the funds received become forgivable.

  • Extends the June 30th deadline to December 31st to rehire a full staff. This will allow businesses impacted by COVID to rehire staff as it makes sense with their operations.

  • Extends the repayment period for any unforgivable funds from 2 years to 5 years.

  • Allows businesses that received PPP loans also defer payroll tax payments. Currently only those who have not received loan funds are eligible to defer payroll taxes. These taxes would need to be paid at a later date. We don’t advise taking advantage of this unless cash is tight as those taxes will be due at a later date.


  • Currently the owner compensation maximum forgiveness of $15,385 ((100,000/52)*8) is still in place. We do not know if this will be adjusted with the change in the loan forgiveness period from 8 to 24 weeks and will wait for additional guidance from the SBA.

  • If you have been closed or had suspended operations, think through the timing of rehiring a full staff. With the June 30th deadline extended to December 31st to rehire a full staff, you can rehire your staff as you have the cash flow to make it work.

  • Continue to keep receipts for rent, utilities, and mortgage interest payments made, however, we anticipate most businesses with multiple employees will be able to maximize forgiveness through their normal payroll with an additional 4 months added to the loan forgiveness window.

  • Run payroll as normal as there are soon to be an additional 4 months for those payroll expenses to become eligible for loan forgiveness. There is no need to worry about the forgiveness window.


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