The Senate passed the Paycheck Protection Flexibility Act (PPFA) on June 3rd, 2020. This legislation amends the Paycheck Protection Program (PPP) by the following:
- The PPFA would change loan forgiveness criteria by requiring borrowers to use at least 60% of their PPP loan for payroll costs (salary, wages, benefits) and 40% for non-payroll related costs (rent, mortgage, utilities). The current PPP structure requires at least 75% of the loan be allocated towards payroll and 25% for non-payroll related costs.
- The 8-week covered period for loan forgiveness and restoring FTE is extended to 24 weeks or Dec. 31st, 2020.
- In calculating full FTE return, business can exclude from required FTE target (1) furloughed employees who asked to return work but declined (2) positions that could not be filled because lack of skilled candidates (3) unable to restore business to Feb. 15th, 2020 level.
**** The new criteria must be followed exactly in order to receive loan forgiveness as partial forgiveness is no longer available under the new law.****