Last week, the Paycheck Protection Program Flexibility Act (PPPFA) was signed into law, becoming effective immediately. The PPPFA reforms the Paycheck Protection Program (PPP), which was passed under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and is intended to improve the terms of PPP loans obtained by small businesses to help cover payroll and other costs during the COVID-19 crisis. Certain aspects of the new law, however, may make it more difficult for some businesses to obtain full loan forgiveness.
Employers who received PPP loans after the CARES Act went into effect as of March 27, 2020, soon ran into challenges. For instance, many found that the eight-week period covered by the loan was not enough to provide the financial relief needed to stay afloat. This was particularly true for employers whose businesses were shut down as a result of state orders. Others faced unavoidable reductions to their loan forgiveness amount under the PPP’s reduction rules, based on an inability to return to pre-pandemic workforce numbers by the PPP’s June 30, 2020, deadline.
Continue Reading PPP Flexibility Act – Stretching forgiveness requirements to benefit employers