After passing in the House by a vote of 417-1, the Paycheck Protection Program Flexibility Act was just approved by the Senate. The legislation will extend deadlines and relax restrictions on how loans are used. The president is expected to sign the bill soon. The Paycheck Protection Program was created in March to help employers struggling through the pandemic.
Throughout the crisis, the International Franchise Association (IFA) has rallied the franchise community to raise their voices in support of the Paycheck Protection Program and the revisions. “The PPP has helped countless franchise businesses, but we are in an industry with an uncertain and uneven path to true economic recovery and many of the original provisions did not work for us. Simply put – franchise small businesses needed this bill to survive,” said officials from the International Franchise Association’s Franchise Action Network.
Details of the new legislation include:
- Allows forgiveness for expenses beyond the 8-week covered period to 24 weeks and extending the rehiring deadline.
- Provides a “Borrower’s Choice” provision, which allows those who received PPP loans prior to enactment to choose for the covered period of their loan to either last 8 weeks or 24 weeks from origination.
- Increases the current limitation on nonpayroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent.
- Lengthens the loan maturity date from 2 to 5 years for new loans.