On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA). The PPPFA will provide additional flexibility to many borrowers attempting to maximize the benefits provided by the Paycheck Protection Program (“PPP”) established as part of the CARES Act.

The following are highlights of the PPPFA:

  • The PPPFA reduces the amount of the loan needed to be spent on payroll from 75% to 60%. Note that the law does not change the list of expenses eligible for forgiveness; rent, mortgage payments, utilities, and interest on loans.
  • The PPPFA extends the time period to spend the loans to 24 weeks. While businesses will still need to spend the money on payroll and authorized expenses, they now have until the end of 2020 to do so.
  • For salaries to count towards forgiveness, previous guidelines stated that all workers had to be rehired by June 30, 2020. Under the new law, businesses now have until December 31, 2020, to rehire workers in order for their salaries to count towards forgiveness.
  • In addition to extending the rehire date, the law also adds additional exceptions for a reduced head count. The PPPFA states a business can still receive forgiveness on payroll amounts if it:
    • Is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;
    • Is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or
    • Is able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to February 15, 2020.
  • A business now will have five years at 1% interest to repay the loan. Additionally, the first payment will be deferred for six months after the SBA makes a determination on forgiveness.
  • The PPPFA permits borrowers to delay the payment of employer payroll taxes until December 31, 2021 (with respect to up to 50% of the amounts due) and December 31, 2022 (with respect to the remaining amounts due up to 50%). Borrowers were previously prohibited from this benefit if their loans were forgiven in whole or in part.

Employers should also continue to diligently document their use of the funds, so when loan forgiveness time comes, they can quickly and accurately substantiate their use of the loan and increasing the odds of full forgiveness. 

If you have any questions regarding your PPP loan or need assistance completing your PPP loan forgiveness application and calculating your loan forgiveness amount, please contact John Priola

Visit the Reynolds + Rowella COVID-19 Resource Center for further guidance with answers to frequently asked questions and regulations with interim final rules as they becomes available.


Reynolds + Rowella is a regional accounting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, give us a call at 203.438.0161 or email us.


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