First Step: U.S. House passes ‘Paycheck Protection Program Flexibility Act’
WASHINGTON, D.C. – Today, the U.S. House of Representatives passed H.R. 7010, the Paycheck Protection Program Flexibility Act of 2020, 417 – 1. The bipartisan bill was introduced by Congressman Chip Roy (R-Texas) and Congressman Dean Phillips (D-Minnesota).
The legislation is now headed to the U.S. Senate for consideration.
The Paycheck Protection Program (PPP), first established in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was meant to provide fast relief to small business owners. However, issues such as the 75/25 rule and the extent of the loan forgiveness period have posed as obstacles to small business owners nationwide.
The PPP Flexibility Act reforms essential aspects of the PPP to provide great flexibility for small business owners.
Changes to the PPP include:
- Allowing forgiveness for expenses beyond the 8-week covered period to 24 weeks and extending the rehiring deadline;
- Increasing the current limitation on nonpayroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent;
- Extending the program from June 30 to December 31;
- Extending loan terms from two to five years; and
- Ensuring full access to payroll tax deferment for businesses that take PPP loans.
To view a summary of H.R. 7010, click here. To read the full text of the bill, click here.