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The Legislative Branch

Yesterday, the Paycheck Protection Flexibility Act, a bipartisan bill, passed in the House of Representatives.  The bill is expected to pass in the Senate, as well.

Two Big Changes

The first change to PPP loan forgiveness involves the period in which the loan must be spent. If the bill becomes law, the period will be expended from eight weeks to 24 weeks. Thus, small businesses who have not been able to reopen, still have time to use their PPP loan. Additionally, the first PPP loans received in late April were just about to hit their deadlines in mid-June.

The other change relates to the ratio in which the PPP loan must be spent. Right now, the loan can be used in a 75-25 ratio where the latter percent it to be used for business expenses (only certain business expenses apply). The majority of the loan has to be used on payroll expenses (to be forgiven). With the change from the bill, the ratio would be 60-40 where the majority is still for payroll expenses. The minority is then for business expenses.

What Counts As A Business Expense?

  • Rent
  • Utilities
    • Electricity
    • Gas
    • Water
    • Transportation
    • Internet
    • Telephone services
  • Mortgage interest

What Counts As A Payroll Expense?

  • Salary
  • Wages
  • Commission
  • Cash tips
  • Vacation pay
    • Paid leave
    • Family
    • Medical
    • Sick
  • Group health care coverage
  • Payroll taxes


You can find more details about the PP Flexibility Act from Sarah Hansen.a

Additionally, Alan Gassman breaks down the use of PPP loans in his article.

Lastly, you can find out more about our services here!