On Friday, June 5, 2020, the Paycheck Protection Program
Flexibility Act of 2020 (the Act) became law. The Act modifies
previously adopted CARES Act provisions related to the Paycheck
Protection Program administered by the U.S. Small Business
Administration (SBA).
Among other changes, the Act provides new flexibility on loan
terms and loan forgiveness, but also imposes an important new
condition on loan forgiveness. Specifically:
Minimum Loan Maturity: The Act extends
the minimum maturity date of unforgiven loan amounts from 2 years
to 5 years after the date of the loan forgiveness application. The
amendment is only effective for loans disbursed after the
Act's adoption. For loans made prior to the Act's
adoption, borrowers and lenders must mutually agree to modify the
maturity of the loan to take advantage of the extended
maturity.
