Cresanti's Corner: PPP Flexibility Act Passed

Cresanti's Corner
Cresanti's corner blog

All of us at IFA do everything we can to ensure that the franchise business model is protected and our members are represented and heard. I am happy to share that our recent hard work has paid off — on June 3,  the Paycheck Protection Program (PPP) Flexibility Act was passed in the House and Senate and is on its way to the President!

This new law makes major changes to PPP loan terms so they work better for franchise businesses. These new, important provisions are the direct result of IFA advocacy, and will help franchisees and franchisors stay afloat and retain employees.

Here's what this means for you and your business:

What does the new law do?

  1. Grants businesses flexibility in the percentages of the loan they use for payroll and other expenses. Currently, three quarters of a PPP loan must be used for payroll, which doesn’t often leave enough for other expenses like rent, utilities, and insurance. The law changes that to a 60 percent payroll /40 percent other expenses split, making PPP loans more effective.

    PPP payroll requirements
  2. Allows for loan forgiveness beyond the 8-week covered period. Currently, PPP loan proceeds must be used for expenses in an 8-week span starting when the PPP is funded. Increasing that forgiveness window to 24 weeks will help align federal assistance with reopening timelines and consumer demand.

    PPP loan forgiveness
  3. Defers payroll taxes for businesses who receive PPP loans. That tax deferral will help keep revenue within the local business itself, so that they can use it to maintain operations and retain employees.
  4. Gives businesses more time to rehire workers. The new law changes the PPP’s rehiring deadline to 24 weeks or December 31, whichever comes first.

    PPP rehiring deadline
  5. Extends the loan limit terms. The new law extends the current two-year timeline to pay back the loan to 5 years. Increasing the available time to repay a loan will give them flexibility as they get back on their feet.

    PPP loan term


How did these PPP fixes become law?

In short, IFA advocacy. IFA led the coalition of other influential business groups in support of this bill. More than 5,600 Franchise Action Network advocates contacted their elected officials urging their support of the bill and IFA held 70 telephone town halls where hundreds of franchisees, franchisors, and supplier members could speak with their member of Congress or senator about needed changes to the PPP program.

The result is that Congress passed a law that is specifically designed with your needs in mind. It can help franchise businesses of all sizes better make payroll, keep their lights on, and serve their communities.

What’s next and how do I get involved?

Stay tuned to IFA channels. We will be holding a webinar about this new law and rolling out additional resources for franchise businesses in the coming days and weeks. And of course, join the Franchise Action Network (FAN) to stay in the loop about the policy changes affecting your business.

Thank you to all our members, especially our officers, past chairs, board members and IFA staff for your hard work to get us in a position to successfully advocate for this bill. Please do not hesitate to reach out with any questions.



Robert Cresanti, CFE
President & CEO
International Franchise Association