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  • Writer's pictureFair, Anderson Langerman

How Paycheck Protection Program Flexibility Act Eased PPP Rules?

Updated: Mar 22, 2023

Last night the Senate passed the Paycheck Protection Flexibility Act. The Bill will now go to President Trump for signature. Key provisions of the bill include:

  • PPP borrowers can choose to extend the eight-week period to 24 weeks, but the covered period cannot extend beyond December 31, 2020.

  • The spending percentages have been changed to allow 60% of PPP funds to be spent on payroll vs. the original guidance of 75%. However, this flexibility comes with a rigid provision. If a borrower fails to spend a minimum of 60% of their PPP loan funds on payroll, then the entire loan is ineligible for forgiveness.

  • Borrowers now have 24 weeks, or until December 31, 2020 to restore their workforce to pre-pandemic levels as required for full forgiveness (see point below for exceptions). The previous deadline was June 30, 2020.

  • The legislation includes two new exceptions (for a total of three) related to workforce restoration to receive full PPP loan forgiveness.

The three exceptions are:

  1. Borrowers can exclude from their forgiveness calculations employees who turned down written, good faith offers of rehire.

  2. Borrowers can adjust their loan forgiveness calculation if they could not find qualified employees.

  3. Borrowers can adjust their calculation if they can show that they were unable to restore business operations to Feb. 15, 2020 levels due to COVID-19 related operating restrictions.

  • New borrowers now have five years to repay the loan instead of two. Existing PPP loans can be extended up to 5 years if the lender and borrower agree. The interest rate remains at 1%.

  • The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.

Check back often for the most current information related to PPP provisions.

If you have any questions about forgiveness of PPP loan funds, please contact your Client Service Director at FAL or email us at

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