Bipartisan PPP Bill Passes U.S. House of Representatives

May 29, 2020

On May 28, the U.S. House of Representatives passed the Paycheck Protection Program Flexibility Act (H.R. 7010) with nearly unanimous bipartisan support. H.R. 7010 is stand-alone legislation that specifically addresses Paycheck Protection Program (PPP) borrower concerns. It is important to note that H.R. 7010 has not been enacted into law. The House and Senate must pass the same bill in precisely the same form before it can be presented to the President. The Senate has not formally passed PPP legislation and differing PPP bills have been introduced that will likely be considered during negotiations. Thus, additional modifications to any final PPP legislation are anticipated.      

Highlights of H.R 7010 include the following:

  • Extends Application Deadline - Extends the application deadline from June 30, 2020 to December 31, 2020.
  • Increases Loan Term for New Loans - Loans originated on or after the date of enactment would have a minimum maturity of five years, extending the amount of time borrowers are required to repay the loans. Current PPP borrowers would still be subject to the current two-year term, but H.R. 7010 provides that lenders and borrowers may mutually agree to modify the loan term.
  • Extends Loan Forgiveness Covered Period - Extends the current eight-week forgiveness covered period to 24 weeks from the loan origination date or December 31, 2020.  Borrowers who have already received loans may elect to use the eight-week period.
  • Modifies 75% Payroll Rule – To be eligible for forgiveness, H.R. 7010 reduces the amount of payroll costs from 75% to 60%, allowing 40% of the loans to be used for non-payroll costs.
  • Increases Deferral Period – Increases the deferral period before borrowers must begin to repay any unforgiven loan funds from six months to 10 months after the last day of the covered period.
  • Exemption Based on Employee Availability – During the period between February 15, 2020 and December 31, 2020, the reduction in full-time equivalent (FTE) employees calculation does not apply if the borrower, in good faith, is able to document an inability to rehire individuals who were employees on or before February 15, 2020 and an inability to hire similarly qualified employees for unfilled positions by December 31, 2020. The bill also provides relief to businesses that are unable to return to a pre-COVID-19 level of business activity (prior to February 15, 2020) due to compliance with federal guidelines related to sanitization, social distancing or other safety requirements related to COVID-19.
  • FICA Deferral Expanded – H.R. 7010 would allow employers whose PPP loans are forgiven to continue to defer the employer portion of FICA tax deposits arising between March 27, 2020 and December 31, 2020 until the end of 2021 and 2022.  Currently, employers cannot defer FICA deposits until the PPP loan is wholly or partially forgiven.   

Marks Paneth will continue to monitor developments and will provide updates as they become available. Contact your Marks Paneth advisor if you need additional information or assistance or email

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