The Senate passed The Paycheck Protection Flexibility Act of 2020 on Wednesday, June 3rd to ease restrictions on emergency small business loans intended to avert mass layoffs during the pandemic. The House had passed the bill the week before in a 417-1 vote. The bill is the first major overhaul of the program and was signed into law by President Donald Trump Friday, June 5th.
The legislation relaxes rules under the $670 billion Paycheck Protection Program to give borrowers 24 weeks instead of eight weeks to use the money and would lower to 60% instead of 75% the amount they must spend on payroll to qualify for full loan forgiveness.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
SBA will forgive loans if a certain majority of employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.