A bill to give businesses more flexility on how and when they spend their forgivable Paycheck Protection Program loans passed the House 417-1 on Thursday.
The House bill would increase from eight weeks to 24 weeks the time that businesses have to spend the proceeds of a PPP loan on payroll and other qualified expenses. The bill also would lower to 60% the amount of the loan that must be spent on payroll expenses in order for the loan to be forgiven. The minimum is now 75%. The rest can be used for expenses such as rent and utilities.
Congress created the program with the CARES Act to help small businesses survive the impact of the stay-at-home orders issued amid the COVID-19 crisis. Many restaurants and other businesses, including some farms, have said that they can't spend the money within the eight-week period required for loan forgiveness.
Without the changes, the Small Business Administration program "will be an anchor (to small businesses) that will take them to the very bottom. We can’t let that happen, no way," said Rep. Fred Upton, R-Mich.
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It is not clear when the Senate will act on the issue, though Senate Majority Leader McConnell, R-Ky., told Agri-Pulse's Jeff Nalley on Thursday that some changes need to be made to the program. "This would not be a major bill. It would be kind of a technical correction bill to fix some fo the flaws in PPP," he said.
A rival Senate bill cosponsored by Small Business Chairman Marco Rubio, R-Fla., and ranking member Ben Cardin, D-Md., would extend the covered period to 16 weeks, not 24 weeks, and doesn’t address the 75% payroll minimum.
