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Congressman Tom McClintock

Representing the 4th District of California

Paycheck Protection Program Flexibility Act Signed Into Law

August 11, 2020
Current Issues


June 11, 2020 -- I voted in favor of the Paycheck Protection Program Flexibility Act and am pleased that it passed the House and the Senate with broad bipartisan support. President Trump signed the bill into law today. I have included an outline of the PPP Flexibility Act below:

  • Extends the timeline to spend PPP funds and receive forgiveness from 8 to 24 weeks
    • Extends the deadline to December 31,2020, as opposed to the June 30 (8 weeks) deadline established in the CARES Act
  • Reduces the 75% payroll ratio requirement to 60%
    • At least 60% of a PPP loan must be used for payroll costs to be eligible for loan forgiveness, overriding and replacing the 75% requirement established by the SBA. 
    • The remaining 40% could be used for non-payroll costs such as rent, mortgage interest, or utilities. 
  • Extends loan limit from 2 to 5 years
    • This measure sets a five-year minimum repayment term for any forgivable portions of PPP loans, overriding the two-year repayment term established by the SBA. 
    • This provision only applies to loans issued after enactment of this bill, though borrowers and lenders would be allowed to modify existing loan terms
  • Allows a business receiving loan forgiveness to also defer payroll taxes
    • This was prohibited under the CARES Act
  • Extends the June 30 rehiring deadline and provides relief to businesses that are unable to rehire laid off employees
    • Under current law, businesses must rehire employees by June 30
    • Now, a loan could be forgiven if the business can demonstrate that it is:
      • Unable to rehire a laid off employee
      • Unable to rehire a similarly qualified employee before December 31, 2020
      • Unable to return to a pre-pandemic level of business activity due to compliance with social distancing, safety, or public health guidance related to the COVID-19 pandemic

 

Further Coronavirus update information can be found on the Congressman's  Coronavirus Updates Page.