Last updated June 9th, 2020


Another day, another round of revisions to the PPP.

On June 5, 2020, the President signed the Paycheck Protection Program Flexibility Act (“the Act”), a set of changes to the current rules for the paycheck protection program. Three days later, the SBA administrator and US Treasury Secretary issued a statement “clarifying” the rules in the Act. The news is mostly good, but don’t get too excited just yet – the Treasury and SBA are going to issue even more new rules and guidance for the Act, and we’ll write about those when they happen.

We’ve outlined the updates from the Paycheck Protection Program Flexibility Act below and noted the “clarifications” made by the SBA and Treasury. Keep in mind, however, that the SBA and Treasury may be overstepping here and it’s best to follow the strictest rules in each case.

Getting Your Loan Forgiven

  • Employers still can’t get full forgiveness unless they rehire the number of employees they had before the COVID-19 impact (see more information about that here), but the new act gives employers until December 31, 2020 to rehire instead of June 30.
  • It also provides two new exceptions to the “rehire” rule. Employers might not have their forgiveness reduced for failure to rehire if they provide very clear documentation of:
    • Lack of employee availability (i.e. they tried to rehire but couldn’t find a qualified candidate)
    • An inability of the business to operate at the same capacity due to CDC, HHS, or OSHA standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19
  • The time period to spend the funds for forgiveness purposes has increased from 8 weeks to 24 weeks, although eligible recipients that received a loan before the Act can choose to have the smaller covered period (8 weeks)
  • For forgiveness, 60% of the loan amount must be used for payroll. This replaces the 75% benchmark provided by the SBA but also seems to set 60% as a hard “all-or-nothing” line. (SBA/Treasury Clarification: This is not all-or-nothing. borrowers that don’t spend 60% on payroll can still receive partial forgiveness)
  • Borrowers must apply for forgiveness within 10 months of the end of the covered period

Repaying Your Loan

  • Borrowers now have 5 years to repay the non-forgivable portion of their loan. (SBA/Treasury Clarification: This only applies to loans approved on or after June 5)


If you haven’t yet applied for a PPP loan for your business, you may still have a chance! As of a June 6th report from the SBA, $130.6 billion is still available for PPP loans.

We’ll be back with updates on the SBA and Treasury Department’s new rules and guidance for the Paycheck Protection Program Flexibility Act after those have been posted.