House passes bipartisan PPP Flexibility Act
WASHINGTON, D.C. – The U.S. House of Representatives today, by a vote of 417-1, approved the Paycheck Protection Program Flexibility Act. The legislation, supported by U.S. Rep. Diana DeGette (D-CO), makes key changes to the PPP to make the program more accessible and usable to small businesses that need it most.
“It has become clear that the current one-size-fits-all structure of the Paycheck Protection Program is not working for all small businesses in our community,” DeGette said. “By making the Paycheck Protection Program more flexible, this bipartisan legislation will ensure small businesses can get the help they need to weather this ongoing crisis.”
The legislation comes in response to news that some small business owners were not applying for the federal relief program – despite a demonstrated need – because they did not believe they could meet the current requirements for making the loan forgivable.
For example, under current regulations issued by the Trump Administration, the PPP loans require that no more than 25 percent of loan proceeds can be spent on non-payroll expenses such as rent, mortgage interest, and utilities. This limitation has prevented many small businesses, such as independent restaurants, from applying to the program because their rent is significantly more than 25 percent of their monthly expenses. To address this concern, the PPP Flexibility Act raises that percentage from 25 percent to 40 percent.
Among other things, the PPP Flexibility Act will increase flexibility and access to PPP loans by:
- 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.
This legislation is supported by numerous organizations, including the National Small Business Association, Small Business Majority, Small Business Roundtable, U.S. Chamber of Commerce, National Restaurant Association, Independent Restaurant Association, NFIB, International Franchise Association (IFA), U.S. Hispanic Chamber of Commerce, National Association of Women Business Owners, US Travel Association, American Hotel and Lodging Association, Associated General Contractors of America, National Independent Automobile Dealers Association, National Association of Wholesaler-Distributors, National Newspaper Association, National Association of Manufacturers and others.