Paycheck Protection Program (PPP) Extension, Increased Flexibility Legislation Moves Forward

The National Propane Gas Association (NPGA) reports that on June 5, President Trump signed H.R. 7010, Paycheck Protection Program Flexibility Act (PPPFA), which will increase access for small businesses as well as expand the program’s flexibility. Congress approved the bill on an overwhelmingly bipartisan basis with the House voting in favor 417-1. The Senate quickly followed suit, passing the bill under unanimous consent on Wednesday evening.

The PPPFA makes several modifications to the program, including:

• A 6-month extension, moving the end date of the program from June 30, 2020, to December 31, 2020.
• An increase in the forgiveness window for expenses from eight weeks to 24 weeks and extension of the rehiring deadline.
• An increase in the current limitation on non-payroll expenses, such as rent and utility payments, for loan forgiveness from 25% to 40%.
• In other words, payroll expenses must now make up 60% of the loan, a decrease from the 75% threshold included in the original PPP. PPPFA also seeks to provide some flexibility for businesses that fall just under the 60% requirement. That said, Treasury and SBA will need to provide guidance on this flexibility.
• An extension of loan terms from two to five years.
• Full access to payroll tax deferment for businesses that utilize PPP loans.
• Section 4 of the PPPFA retroactively eliminates the existing prohibition on tax deferrals for federal employment taxes of businesses that had PPP debt forgiven under Section 1106 of the CARES Act, allowing businesses to defer federal employment taxes.

Many of these provisions apply retroactively to PPP participants. While businesses that received loans under the existing PPP still have the opportunity to keep the eight-week forgiveness period, they also have the option to utilize the extended 24-week period included in the PPPFA. This flexibility does not extend to the Rehire and Compensation Safe Harbors provision, which now requires PPP users to show that they did not reduce staff through December 31, 2020, unless they meet requirements included in Section 3(b)(2)(B) of the PPPFA.

NPGA applauds Congress and the Administration for this critical update to the PPP, which will equip small businesses to weather the ongoing headwinds from the COVID-19 global pandemic.

SOURCE: The Weekly Propane Newsletter, June 11, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.