In some welcome news, the Senate passed the House Bill to provide enhanced and, in many cases, more lenient guidelines for PPP loan forgiveness. As soon as the President signs The Paycheck Protection Flexibility Act, borrowers will be able to adjust their plans and budgets for the use of their PPP funds according to the following:

  • The 8-week period originally mandated for borrowers to use the PPP funds has been extended to 24 weeks. Borrowers may still choose to use the original 8-week guideline.
  • Borrowers now have 24 weeks to restore workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by December 31, 2020.
  • Borrowers may adjust FTE calculations used for loan forgiveness if they are unable to find qualified employees or to restore business operations to February 15, 2020, levels due to COVID-19 related operating restrictions.
  • The amount of the loan that must be spent on qualified payroll costs dropped from 75% to 60%. Please note, however, that borrowers must now spend at least 60% on payroll or none of the loan will be forgiven. Previously, the amount of the loan eligible for forgiveness only diminished if less than 75% was used for payroll costs.
  • Borrowers now have 5 years to repay PPP loans.
  • Businesses that received PPP loans may now delay payment of payroll taxes.

Something to consider, from our Partner, Chadwick J. Milton, CPA, CVA, MBA: With the second quarter payroll reports due in July, if you paid an employee up to 2 weeks of pay because they either were infected with COVID-19 or because they were required to quarantine under state guidelines, or you paid an employee for up to 12 weeks while they were unable to work due to taking care of a relative or child while there was no school or child care available, you should indicate the employee and the dates they were paid for such instances to your payroll provider in order to get a payroll tax credit under the FFCRA. Due to the increase to a 24-week period that the money can be used, it could be advantageous to take these credits as well. Please note that wages considered for any of these credits are not allowed to be used for determination of PPP loan forgiveness but with the extended period of use, it will likely be that you can get these credits and still meet the full loan forgiveness.

As can see, this update once again poses a new set of yet to be answered questions and potential opportunities surrounding the interpretation and application of PPP Loan Forgiveness Guidelines. Please contact us if you require assistance making planning adjustments related to new legislation, or if there is any other way we can support you.



  • The Bumpers & Company Team