• Keith Fulfer

Trump signs law that reforms the PPP!

President Trump signed into law sweeping changes to the Small Business Administration's Paycheck Protection Program on June5th. This makes the program's lending terms more favorable to restaurants, retailers and other businesses.


The bipartisan bill, titled the Paycheck Protection Program Flexibility Act of 2020, was passed May 28 by the House of Representatives and subsequently passed by the Senate on June 3 with bipartisan support, the only PPP reform effort to become law so far.


The legislation extends the eight-week period under which loan recipients can spend the PPP money while also addressing other details that have worried many small businesses.



The Paycheck Protection Program Flexibility Act overhauls, key aspects of the program, and will:

  • Extend the “covered period” under which small businesses can spend the loan proceeds from eight weeks to 24 weeks, or until Dec. 31.

  • Remove the limits on loan forgiveness for small businesses that were unable to rehire employees, hire new employees or return to the same level of business activity as before the virus.

  • Expand the 25% cap to use PPP funds on nonpayroll expenses, such as rent, mortgage interest and utilities, to 40% of the total loan. That lowers the 75% requirement for payroll expenses to 60% to get maximum forgiveness.

  • Allow small businesses to take a PPP loan and also qualify for a separate, recently enacted tax credit to defer payroll taxes, currently prohibited to prevent “double dipping.”

  • Extend the loan terms for any unforgiven portions that need to be repaid from two years to five years, at 1% interest.

  • Give small businesses more time to rehire employees or obtain forgiveness for the loan if social-distancing guidelines and health-related actions from the Centers for Disease Control and Prevention or other agencies prevented the business from operating at the same capacity as it had before March 1.

  • Extend the period for when a business can apply for loan forgiveness, from within six months to within 10 months of the last day of the covered period, before it must start making interest and principal payments. Under the new bill, PPP loan interest and payment of principal and fees will be deferred until the loan is forgiven by the lender.

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