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House Passes Bill to Extend PPP Loan Deadlines

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House lawmakers passed Wednesday afternoon the Paycheck Protection Program Flexibility Act of 2020, H.R. 7010, which extends several deadlines for small businesses who received PPP loans.

H.R. 7010 does the following:

  • Allows forgiveness for expenses beyond the 8-week covered period to 24 weeks and extends the rehiring deadline;
  • Increases the current limitation on non-payroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25% to 40%;
  • Extends the program from June 30 to Dec. 31;
  • Extends loan terms from two to five years; and
  • Ensures full access to payroll tax deferment for businesses that take PPP loans.

Rep. Dean Phillips, D-Minn., who sponsored the legislation with Rep. Chip Roy, R-Texas, said in a Thursday tweet that “with a 471-1 vote, the PPP Flexibility Act is a proven winner and the Senate should pass it without delay. Good policy and good representation begin with listening – this is what small businesses are telling us they need to survive.”

As for extending the deadline to apply for a PPP loan to Dec. 31 from June 30, Leon LaBrecque, chief growth officer at Sequoia Financial Group in Troy, Michigan, told ThinkAdvisor Thursday that while the extension is nice, “but again, what about those businesses that needed it, used it and followed the old rules?”

LaBrecque said the bill would also require at least 60% of forgiven loan amounts to come from payroll expenses, which is an “acceptable change.”

Another “acceptable” change: the bill also repeals a provision from the CARES Act that barred companies with forgiven PPP loans from deferring their payroll tax payments.

Borrowers would also be able “to defer principal and interest payments on PPP loans until the SBA compensates lenders for any forgiven amounts, instead of the current six-month deferral period,” LaBrecque explained. “Borrowers that don’t apply for forgiveness would be given at least 10 months after the program expires to start making payments.”

“This bill significantly increases small businesses’ ability to have their PPP loan fully forgiven and will change forgiveness compliance,” said Erik Asgeirsson, CEO and president of, in a statement. “The current lack of flexibility in some PPP provisions has created unnecessary challenges. We welcome Congress’ attention to this important issue as it will allow more businesses to apply for and use PPP relief.”

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