Paycheck Program Protection Flexibility Act

June 6, 2020

On June 5, President Trump signed the Paycheck Program Protection Flexibility Act (PPPFA) to provide updates to the Paycheck Protection Program. The PPP was instated earlier this year to combat the financial fallout of the COVID-19 epidemic. The new act includes the following updates [1]:

  • Current PPP borrowers and new applicants will now have twenty-four weeks instead of eight weeks to use the funds received. This increases the chance a borrower will reach full or almost full forgiveness.
  • The payroll expenditure requirement has been decreased from 75% to 60%. Under the PPPFA, 60% of funds received must be used on payroll expenses or none of the loan will be forgiven. Previously, if less than 75% of the loan was spent on payroll then the amount of forgiveness would be reduced.
  • Under the PPP, only wages paid by June 30, 2020 were counted towards the payroll expenditure requirement. Under the PPPFA, wages paid through December 31, 2020 will be counted.
  • While the loan’s interest rate will remain at 1%, borrowers now have five years to repay the loan instead of two.
  • Businesses that have received a PPP loan can delay payment of payroll taxes. This was previously prohibited.
  • The PPP required businesses to fully restore their workforce in order to achieve full loan forgiveness. One exception was granted if employees turned down good faith offers to return to work. The PPPFA includes two new exceptions for being unable to find qualified employees or being unable to restore operations to February 15, 2020 levels.

The new act should provide business owners with greater flexibility in fund usage over a longer period and a greater opportunity to have their loan fully forgiven.

For more information on the Paycheck Protection Program and assistance on completing the applications and/or loan forgiveness forms, we encourage you to contact one of our experts today.


Joe Aguilar, Partner

Emily Johnson, Valuation Analyst


The information provided herein is accurate as of the date of entry and relies on data available at the time of writing. Given the rapidly changing environment, the information provided is intended as a resource only and should not replace direct consultation of relevant laws, policies, and guidelines. HMS Valuation Partners is committed to ensuring that clients have accurate and up-to-date information and is closely monitoring any changes in policy and practice relevant to COVID-19.


[1] Drew, Jeff. “PPP forgiveness changes coming as Senate passes House bill.” Journal of Accountancy. 4 June 2020. 5 June 2020.

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