On Friday the Senate passed the Paycheck Protection Program (PPP) Flexibility Act, which provides additional guidance and relief for thousands of small businesses who are struggling with the current PPP guidelines.
The 60% Line
If a business spends less than 60% of the PPP loan amount on payroll costs, then a portion of the loan will be forgivable, rather than no forgiveness at all.
Only Post-June 5th Approved Borrowers Will Get a 5-Year Payback Period
Loans approved after June 5th will have 5 years, rather than 2, to pay the loan back with no interest. If the loan is not repaid within that time, the 1% interest will kick in. Banks can extend the pre-June 5th loans up to 5 years, but are not required to.
“It is very predictable that further adjustments will occur in these rules, and that they will primarily be borrower-friendly.”