The U.S. House today passed H.R. 7010, the Paycheck Protection Program Flexibility Act, by a vote of 417-1. The bill, sponsored by Rep. Dean Phillips (D-MN), would relax restrictions on Paycheck Protection Program (PPP) loans and make it easier for businesses to have them forgiven.
The legislation allows businesses that have received PPP loans and want to seek loan forgiveness to spend less of the money, 60 percent instead of the current 75 percent, on payroll and maintain forgiveness eligibility. In addition, businesses would have more time to use the funds—24 weeks instead of eight – and extends the deadline for rehiring workers from June 30 to the end of this year.
PIA National is disappointed that the percentage requirement for payroll was not fully repealed in the bill. Last week, PIA National was joined by over 100 business groups to ask that the 75 percent requirement to use the money for payroll be repealed, because it has tempered the usefulness of the loans for small businesses, because they can’t use the appropriated funds to pay rent, mortgage, utilities, or vendor services. In fact, the initial draft of the bill eliminated the 75 percent requirement. Unfortunately, the influence of powerful labor unions and comments from U.S. Treasury Secretary Steven Mnuchin that the requirement should stay at 75 percent led to the compromise included in the bill that passed today, which lowers the requirement from 75 to 60 percent.
The Senate has not yet passed a bill to reform the PPP, and PIA National will continue to work with policymakers as they consider appropriate reforms to the program to improve it for small businesses and allow it to accomplish its goals: to keep businesses solvent and employees employed.