President Donald Trump is expected to sign a bill giving farms and businesses more flexibility in how and when they can spend their Paycheck Protection Program loans and still get them forgiven.
A House measure the Senate approved by unanimous consent Thursday evening increases 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 lowers 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.
The bill passed the House 417-1 last week,
The American Farm Bureau Federation wanted Congress to eliminate the minimum requirement for payroll expenses, but agricultural accountant Paul Neiffer said the extension to 24 weeks makes that requirement easier to meet.
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 they can't spend the money within the eight-week period required for loan forgiveness.
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As of May 30, banks had processed 127,465 PPP loans totaling $7.6 billion to farmers and other businesses in the sector classified by the Small Business Administration as "agriculture, forestry, fishing and hunting."
Farm Credit institution have made 13,851 loans totaling $1.3 billion.
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