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COVID-19 Small Business Update: Understanding the Paycheck Protection Program Flexibility Act

On June 5, 2020, President Trump signed into law H.R. 7010, the Paycheck Protection Program Flexibility Act (“PPPFA”). This PPPFA corrects a number of problems with the PPP Loan Program that prevented many small businesses from successfully utilizing the Program.

These changes are as follows:

  1. The “Covered Period” during which the PPP funds must be used is extended from eight (8) weeks to twenty-four (24) weeks. Many companies could not meet the 8 week mark because of governmental shutdowns which forced lay-off and furloughing of employees.

  2. The Payroll Expenditure Requirement which under interim rules mandated that 75% of all PPP Loan funds would have to be spend on Payroll has been reduced to 60% on Payroll allowing businesses to utilize 40% of PPP Loan funds on such things as rent, utilities, and pre existing debt without forfeiting loan forgiveness.

  3. The time to achieve FTE Restoration is extended from June 30, 2020 to December 31, 2020. This extension will give companies a chance to bring back employees as the economy returns from lockdown and not suffer a reduction in loan forgiveness. PPPFA also provides exemptions from this requirement for employers who have an inability to rehire employees or difficulty in hiring similarly qualified employees.

  4. The Maturity Date of the PPP Loan is extended from two (2) years to five (5) years which will provide companies an opportunity to survive the full anticipated economic downturn due to COVID-19. This new Term of the Loan applies to loans established after passage of PPPFA but also allows borrowers and lenders to conform to new Maturity.

  5. The Loan Payment Deferral is extended from six (6) months to either ten (10) months after the Covered Period or alternatively after a partial Loan Forgiveness Date.

  6. The Payroll Tax Deferral, which allows a business to delay the payment of the employers share of 2020 payroll taxes in the amount of one half such taxes until December 31, 2021 and the remaining half of the taxes until December 31, 2022, is now available to PPP borrowers who have forgiveness of their loan in whole or in part which was prohibited prior to PPPFA.

Additionally, PPPFA did not change the June 30, 2020 deadline for the SBA to issue any new PPP Loans. Should you have any questions related to PPP Loans or PPPFA, please do not hesitate to contact us at

The information contained on this website is made available by Tinti & Navins, P.C. for educational purposes only and is not to be construed as specific legal advice. By using this information you understand that there is no attorney-client relationship between you and Tinti & Navins, P.C. The information contained on this website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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William J. Tinti, President of Tinti & Navins, P.C., has been appointed by the Governor of Massachusetts to the MAPC.


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