THE NEUTRAL ZONE
The Senate passed a bill late Wednesday that would ease conditions for small businesses using the Paycheck Protection Program. The new Paycheck Protection Flexibility Act would allow businesses to have more time to use their loan money, eliminate restrictions limiting non-payroll expenses, and extend the loan’s terms past two years. President Trump is expected to sign the bill.
The House-passed bill was on its way to being cleared by Senate Minority Leader Schumer (D-NY), Sen. Shaheen (D-NH), and Sen. Ben Cardin (D-MD) when Sen. Johnson (R-WI) initially stopped Sen. Schumer’s attempt to unanimously pass the bill. Shortly thereafter, Sen. Johnson agreed after it was clarified the extension of the PPP would only apply to spending and would not extend the application deadline. Sen. Schumer spoke out regarding the bill, saying, “We can’t wait any longer. Businesses are really suffering for lack of these changes.” Sen. Johnson said he supports the program, but wants to ensure changes support the businesses that truly need the loans.
The PPP has not been free of issues – business owners have complained about missing out on crucial funding and most recently, some mistakenly received their money twice or multiple times. Congress created the PPP as part of the $2T rescue package passed in March aimed to help curb the pandemic’s impact on small businesses.
PPP forgiveness changes coming as Senate passes House bill – Journal of Accountancy – 6/4/2020
The bill passed in a unanimous voice vote hours after Wisconsin Sen. Ron Johnson initially blocked it. Among the key provisions is a change in the threshold for the amount of PPP funds required to be spent on payroll costs to qualify for forgiveness to 60% of the loan amount.
Why Changes To PPP That Are About To Become Law Will Help Borrowers Obtain Loan Forgiveness – Forbes – 6/4/2020
“The bill doesn’t include everything, but it’s a good start,” says Brian Streig, CPA and Tax Director of Calhoun, Thomson + Matza, LLP in Austin, Texas. “I do think this bill is good for small business owners who have taken out Paycheck Protection Program loans.”
Senate passes changes to Paycheck Protection Program – American Banker – 6/3/2020
Timing is urgent because the eight-week spending period began expiring last Friday for the first loan recipients after the Small Business Administration program opened April 3. Businesses — especially in the restaurant and hospitality industry, which are only recently getting the green light to reopen — say they need more time to distribute pay.
Bankers want businesses to know “there’s still money” for PPP loans – Marketplace – 6/3/2020
The federal Small Business Administration still has around $110 billion left for businesses seeking possibly forgivable loans through the Paycheck Protection Program, but the flow of new applications is slowing.
House Republicans on Twitter, 6/4/20: Next stop for the Paycheck Protection Program Flexibility Act ⟶ President Trump’s Desk. Makes it easier for small businesses to recover. Extends loan forgiveness from 8 to 24 weeks. 5-year loan maturity. More flexibility for how #smallbiz use loan funds
Center for Responsible Lending on Twitter, 6/4/20: Congress is sending to the president’s desk a bill that makes necessary but insufficient changes to the troubled small business loan #PaycheckProtectionProgram. #PPP 1/6
U.S. Chamber on Twitter, 6/4/20: We applaud last night’s Senate passage of the Paycheck Protection Program Flexibility Act, which will help Main Street’s efforts to re-open, providing flexibility for almost 4.5 million small businesses that have received #PPP loans administered by SBA.
Rep. Lauren Underwood on Twitter, 6/4/20: I am pleased that that Senate passed the Paycheck Protection Program Flexibility Act to expand this critical program to help small businesses across the country. I urge the President to sign this bill immediately.