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Trump signs PPP reform bill loosening restrictions on small business loan recipients

President Trump on Friday signed into law bipartisan legislation giving small business owners who tapped a federal aid program more flexibility in how they spend the loans, the latest effort by the federal government to blunt the economic pain of the coronavirus pandemic.

The Paycheck Protection Program, a centerpiece of the $2.2 trillion CARES Act, provided forgivable loans of up to $10 million to businesses with fewer than 500 workers.

But the new law - the Paycheck Protection Program Flexibility Act - eases the restrictions on how the money must be spent in order to be forgiven. Loan recipients now only have to spend 60 percent of the aid on maintaining payroll — including salary, health insurance, leave and severance pay —  rather than the previous 75 percent rule. The remaining 40 percent can go toward operating costs like rent and utilities.

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