After much news coverage, the Senate passed the House version of the Paycheck Protection Flexibility Act on June 3rd, 2020. The president signed the act into law two days later. The PPFA provides significant changes to how small businesses can use their PPP loans and the qualifications for forgiveness of those loans. Below, are the main items for each small business to know.

  • The biggest change is the extension to the period you can use the PPP loan. The covered period has been increased from 8 weeks to 24 weeks. This will give all businesses an easier path to using the total amount of loan funds.
  • The restriction of using 75% of the loan on payroll costs has been relaxed to 60%, now with the “other costs” like rent and utilities being limited to 40%. As with the first point, this should give businesses greater flexibility and ease in using the funds.
  • Unforgiven funds can now be paid back over 5 years instead of the original 2. If any funds can’t be forgiven for a business, they now have 5 years to pay the money back as a loan with the same 1% interest rate as before.
  • Businesses now have until 12/31/2020 to restore the level of employees pre-Coronavirus vs the original date of 6/30/2020.
  • Safe Harbors: There are two new safe harbors in effect to help businesses that can’t get back to the employment levels they had before. First, you can’t attain employment levels because of mandated social distancing, health, or safety rules. Second, you can’t attain employment levels because of not finding qualified candidates to fill open positions.
  • You now have 10 months from the end of the covered period (changed to 24 weeks) to apply for forgiveness. This means no company has to rush to the bank to seek forgiveness as all businesses have plenty of time to have all expenses forgiven.


We have heard from many of our clients already on these changes with mostly positive attitudes. The biggest objections or complaint for most is the longer wait on applying for forgiveness. This is understandable as most want peace of mind and to move on to other tasks. Keep in mind, these changes will also mean new guidance from the IRS, SBA, and your bank on how to apply for forgiveness. Please reach out to your payroll provider, CPA, or banker to confirm any changes that may take place.



Links related to the Payroll Protection Flexibility Act:

Text of PPFA bill HR 7010:


Disclaimer: The subject matter in this article is subject to change and re-interpretation at any time by the SBA, Treasury, Executive Order, or Congress, and the author may or may not have a chance to update the material between when the changes were made and your reading. This article is meant to provide general guidance on PPP Loan Forgiveness, and the reader should seek specific advice for his or her situation from an attorney, CPA, or SBA representative. Neither the author nor Complete Payroll Services make any representation or warranty as to the final accuracy or interpretation of the materials herein.

About the author: Andrew King is the President Complete Payroll Services. He has worked in the payroll and HR industry for 15 years. He can be reached at