PPP Forgiveness Update – New Act Means More Flexible Requirements

On June 5, President Trump signed the Paycheck Protection Program Flexibility Act of 2020. The bill addresses many of the concerns expressed by businesses throughout the U.S. regarding fixing flaws in the Paycheck Protection Program.


  • The covered period for calculating the forgiveness of the use of PPP funds has been extended from 8 weeks to 24 weeks.
  • Borrowers can use the 24-week period to restore their workforce levels. This must be done by Dec. 31, a change from the previous deadline of June 30. The percentage of proceeds from the PPP loan that must be used for payroll has been reduced from 75 percent to 60 percent.
  • Borrowers now have five years to repay the unforgiven portion of the loan instead of two. The interest rate remains 1%.

PBO Advisory Group suggests that you refrain from preparing your PPP Forgiveness Application until:

  • The Treasury and the Small Business Association issue further guidance on forgiveness to include new guidance as dictated in the Flexibility Act.
  • A new PPP forgiveness application is created and made available by the Treasury/SBA which incorporates the proposed changes in the Flexibility Act.
  • The SBA is prepared and capable of actually accepting and processing PPP forgiveness applications.
  • We are confident that no further changes are coming that could dramatically impact the forgiveness process and the banking community has received final and thorough guidance from the Treasury/SBA on the new forgiveness process.

We will be providing further updates as needed. In the meantime, if you have any questions, please contact us.