On Wednesday the Senate cleared changes to the popular Paycheck Protection Program (PPP) that will allow more flexibility for small business to use the rescue loan funds. The bill, which passed the House on a 471-1 vote last week, is now heading to the desk of President Donald Trump for his signature.
Hours after Ron Johnson, a Wisconsin Republican, had raised objections, senators gave unanimous consent for the bill.
In the Covid-19 crisis, the coronavirus program provides forgivable loans to help small businesses make their payrolls. The bill will stretch a period of eight weeks — where proceeds had to be paid on debts to be repaid — to 24 weeks or before the end of the year, whichever comes first.
Small business loans
Companies would also have to repay any money owed on a loan for as long as five years, instead of two, and they could use a higher percentage of rent proceeds and other approved non-payroll expenses.
Timing is urgent because the eight-week spending period for the first loan recipients began to expire last Friday. After the Small Business Administration program opened April 3. Businesses — particularly in the restaurant and hospitality sector. Which only recently get the green light to reopen — say they need more time to distribute the pay.
Utah Senator Mike Lee had also objected to language that he and Johnson said the application deadline would be longer. Maine Senator Susan Collins did not condemn the bill but said she was worried how the House introduced a clause. A clause that would eliminate the existing demand that 75 percent of a loan be on payroll.
Lee’s office said the senator agreed to pass the bill. After securing a letter signed by Small Business Committee chairmen and ranking members. Clarifying that the application deadline remains June 30.
In addition to expanding the loan-forgiveness period. Small companies have said they want freedom to invest more on overhead costs. Especially in high-rent areas. The Fact, H.R. 7010, however, would allow 60 percent of the loan to be for payroll purposes.