Client Alert: PPP Flexibility Act Of 2020

On Friday June 5, President Trump signed into law the Paycheck Protection Flexibility Act which makes the following tweaks to the original terms of the Paycheck Protection Loan Program.

Extension of the Covered Period

• Extends the time period during which a loan recipient may spend PPP funds from 8 to 24 weeks (the "covered period").
• It was originally thought that the covered period for purposes of attaining a loan would be extended to December 31, 2020. However, in a Joint Statement issued on June 8^th, the SBA and Treasury noted the last date on which a PPP loan application can be approved remains June 30, 2020.

Use of Loan Proceeds

• Requires a borrower to use at least 60% (down from 75%) of the PPP loan amount for payroll costs to receive full loan forgiveness.