President Signs Payment Protection Program Flexibility Act Into Law

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The Pool and Hot Tub Alliance continues to inform industry professionals on updates around COVID-19. This week, they sent out a press release on the Payment Protection Flexibility Act, which was signed into law this week. Read the organization's statement below:



On Friday, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) in an attempt to address many concerns expressed by the small business community around the Paycheck Protection Program (PPP) aimed at providing COVID-19 relief.

It is important to remember that the SBA and Treasury will have to issue new instructions to implement changes, so borrowers will have to wait for those updated instructions before applying for forgiveness. That guidance could take anywhere from a week to several weeks to be released. We will keep you updated in real-time as new guidance is issued.

Read more here.





ORIGINAL: Borrowers must spend loan funds within eight weeks of receiving the loan.

UPDATED: Borrowers must spend loan funds within 24 weeks of receiving the loan, or by December 31, 2020, whichever is earlier.

Borrowers who received their PPP loan before H.R. 7010 was enacted may choose to keep their original 8-week period, and not extend to 24 weeks.




ORIGINAL: At least 75% of the loan must be used for payroll expenses if the borrower seeks maximum loan forgiveness. No more than 25% can be spent on nonpayroll costs.

UPDATED: At least 60% of the loan must be used for payroll expenses if the borrower seeks maximum loan forgiveness. No more than 40% can be spent on nonpayroll costs.




ORIGINAL: Two-year loan terms at a 1% fixed rate.

UPDATED: New PPP loans disbursed after the enactment of H.R. 7010 will have five-year loan terms, still at a 1% rate. Terms for loans that were disbursed before the enactment of this bill can be modified upon mutual agreement between the lender and borrower. However, there is no requirement that a lender modify terms, and no guidance on what happens if there is an impasse. We will watch the implementation of this provision closely.


ORIGINAL: Loan payments are deferred for 6 months from the date the loan is disbursed.

UPDATED: Loan payments are deferred until the date on which the amount of loan forgiveness is remitted to the lender.


ORIGINAL: No comparable provision.

UPDATED: Borrowers who do not apply for forgiveness will be required to begin making payments no earlier than 10 months after the last day of the “covered period.”




ORIGINAL: Borrowers cannot deduct payroll tax expenses that would otherwise be deductible if they use their PPP loan to cover the expense and the loan is forgiven.

UPDATED: Removes the limitation on borrowers’ use of the payroll tax deferment.




ORIGINAL: Borrowers avoid FTE-based reductions in their loan forgiveness amount for two specific circumstances.

A borrower’s loan forgiveness amount will not be reduced for any employee who is fired for cause, voluntarily resigns, or voluntarily requests a reduced schedule during the covered period.

If the borrower eliminates reductions in salaries or FTE employees by June 30, 2020, the borrower is exempt from any reduction in loan forgiveness amount that would otherwise be required due to reductions in salary or FTE employees.

UPDATED: Maintains both provisions, and makes a June 30, 2020 safe harbor date an option for those borrowers who choose to elect it.

Adds two circumstances where borrowers can avoid reductions in loan forgiveness. The borrower must document the following:

An inability to restore FTE headcount on or before December 31, 2020, either because furloughed or laid off employees decline to return, or an inability to hire similarly qualified replacement employees, OR

An inability to return to the same level of business activity as before February 15, 2020, because of government guidance or mandates during the period of March 1, 2020 through December 31, 2020.



To provide guidance and help you and your company continue to navigate COVID-19, make sure to visit

If you have any questions, please reach out to [email protected].

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