HAPPENING NOW: Relaxed Rules for PPP Loan - What you need to know

Updated: Aug 20, 2020

In what we can only hope is the beginning of some real bi-partisan lawmaking, the House Passed a PPP bill on May 27th a whopping 417-1 and the Senate passed it UNANIMOUSLY on Wednesday. The President signed it into law today. Here are the highlights:



  1. How Much of the PPP Money Must be Spent on Payroll?

  • Was: 75%. Now: 60%.

  • The original law stated you needed to spend 75% of the funds on payroll and benefits. This new law relaxes that number to 60% with the other 40% being allowed to fund other expenses such as rent/mortgage.

  • The list of expenses eligible for forgiveness HAS NOT changed.



  1. How Long Do I Have to Spend my PPP Funds?

  • Was: 8 weeks. Now: 24 weeks.

  • Original law said you had to spend all your PPP money within 8 weeks to be eligible for forgiveness. This was a major issue for many employers who were either not allowed to open or were open with very little work. Now a business has 24 weeks to spend the funds.


  1. When Do I Have to Rehire My Employees to be Eligible for Forgiveness?

  • Was: June 30th, 2020. Now: December 31st, 2020.

  • Again, many businesses are still not allowed to be open, so hiring people back by June 30th was going to be quite an issue for businesses. Now these businesses have until the last day of the year to rehire and still be eligible for loan forgiveness of that employees wages.



  1. How Long Do I Have to Repay the Loan?

  • Was: 2 years. Now: 5 years.

  • The original CARES Act stated a loan repayment term of longer than 2 years originally, so this is more of a correction than capitulation.

  • Payments do not need to start until 6 months after the SBA makes a determination on forgiveness.




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