On June 3, the Senate passed the “PPP Flexibility Act” by unanimous consent. This bill, which the House passed last week by a vote of 417-1, amends the CARES Act to give more flexibility to PPP borrowers in how they can use their loan proceeds. Specifically, the bill makes the following positive changes to the program:
- Extends the PPP program through the end of this year. The application deadline remains June 30, 2020.
- Increases the amount of time borrowers have to use their loans from 8 to 24-weeks (borrowers who use it in 8 will not be penalized).
- Decreases the mandatory payroll amount of the loan from 75% to 60%.
- Extends the forbearance period for a PPP loan from six-months to a year.
- Extends the re-hire exemption for businesses from June 30 to December 31.
The bill has been sent to the President, and he is expected to quickly sign it into law. The SBA and Treasury will need to issue new guidance and new forms to reflect these changes to the program, which we anticipate will be top priorities for them. NAR is updating its resources to reflect these changes and will keep you apprised as we learn more from the Treasury and SBA going forward.