May 28 2020 the U.S. House of Representatives passed H.R.7010, the Paycheck Protection Program Flexibility Act, by a vote of 417-1 conducted via the newly implemented proxy voting system. The legislation is intended to provide PPP loan borrowers with more flexibility with how they use their loans by:
- Extending the expense forgiveness period from 8 weeks to 24 weeks
- Reducing the 75% payroll ratio requirement to 60%
- Eliminating 2-year loan repayment restrictions for future borrowers
- Allowing payroll tax deferment for PPP recipients
- Extending the June 30 rehiring deadline to December 31, 2020 (with certain exceptions)
The bipartisan bill now heads to the Senate for consideration, which may amend the legislation to include further PPP reforms. An additional change being considered in Senate proposals, such as Sen. Marco Rubio’s S.3833, is categorizing personal protective equipment (PPE) expenses as a covered expense under PPP loans.