Businesses Get More Flexibility on PPP Loans

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The American Orthotic and Prosthetic Association (AOPA) issued a release outlining recent changes to the Paycheck Protection Program (PPP) as follows:

Congress finalized legislation this week to ensure that businesses that received a forgivable loan through the PPP can have more leeway on how to spend those funds.

Under the newly passed Paycheck Protection Program Flexibility Act of 2020, small businesses would have to spend 60 percent of the loan money on payroll compared to 75 percent as outlined in the original law.

In addition, current PPP borrowers can choose to extend the eight-week period of the disbursement to 24 weeks, or they can keep the original eight-week period if their business has sufficiently recovered. New PPP borrowers will have a 24-week covered period, but the covered period can't extend beyond December 31, 2020. Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by December 31, 2020, a change from the previous deadline of June 30.

The bill includes two exceptions allowing borrowers to reach full PPP loan forgiveness even if they aren't able to fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to February 15, 2020, levels due to COVID-19 related operating restrictions.

Finally, the bill extends a June 30, deadline to rehire workers, pushes back the timeline for repaying loans, and allows companies that get loan forgiveness to defer payroll taxes.

For questions, contact Justin Beland, director of government affairs for AOPA, at, and keep checking AOPA's website for more updates.