The Senate tonight unanimously passed a bipartisan bill that would provide greater flexibility for Paycheck Protection Program borrowers. Having cleared the House last week, the Paycheck Protection Program Flexibility Act now goes to the president to be signed.
The bill extends the maturity period for unforgiven PPP loans made after the date of enactment to five years; the maturity on previous PPP loans is not automatically extended but may be extended by mutual agreement of the lender and the borrower. The bill also extends the forgiveness period for all PPP loans to 24 weeks from the date of origination.
The bill would also reduce the minimum amount that businesses must devote to maintaining payroll from 75% to 60% in order to receive forgiveness. ABA and the state bankers associations continue to advocate for a more streamlined approach to loan forgiveness.
ABA appreciates the Senate and House both approving changes to the #PPPLoan program to make it more flexible for small businesses. Banks of all sizes will continue to support small businesses in need by using this important financial lifeline. https://t.co/ZuBWch0Kkg
— American Bankers Association (@ABABankers) June 4, 2020
“ABA appreciates the Senate and House both approving changes to the PPP to make it more flexible for small businesses,” the association noted on Twitter. “Banks of all sizes will continue to support small businesses in need using this important financial lifeline.”