The House of Representatives overwhelmingly passed legislation that would make significant changes to loans made to employers under the Paycheck Protection Program.
The Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010) was introduced by Chip Roy (R-Texas) and Dean Phillips (D-Minn.) and was approved on a strong bipartisan vote of 417-1. If enacted into law, the bill would update the PPP loan program to do the following:
- Extend the eight-week covered period to 24 weeks that businesses have to use the funds and restore laid-off employees to qualify for loan forgiveness
- Extend the PPP program deadline through Dec. 31 (under the CARES Act, the program currently runs through June 30)
- Change the 75% payroll costs/25% non-payroll costs rule regarding how loan proceeds must be used to qualify for forgiveness to 60%/40%
- Extend the term of the loan repayment on funds not forgiven from two years to five years
- Ensure full access to payroll tax deferment for businesses taking PPP loans (under the CARES Act, an employer currently cannot defer payroll taxes if receiving any forgiveness on a PPP loan)
In the Senate, a bipartisan group of senators is considering a different version of legislation to extend the length of the PPP loan forgiveness period from the current eight weeks to 16 weeks. It is possible the Senate could consider H.R. 7010 as passed by the House—or its own bill to make changes to the PPP—as early as this week.
Also, separate legislation, the Small Business Transparency and Reporting for the Underbanked and Taxpayers at Home Act (H.R. 6782), which would require the disclosure of information regarding any recipient of a grant or loan funded by the CARES Act (which includes PPP loans), was defeated in the House May 28.
As of this week, there is about $130 billion still available in the PPP loan program. If you are interested in applying for a PPP loan, view more information, including the application.
