Both chambers of Congress have approved a bill to modify certain provisions employers must follow to be eligible for loan forgiveness under the Paycheck Protection Program (PPP).
The U.S. House of Representatives passed the bipartisan Paycheck Protection Program Flexibility Act in a 417-1 vote on May 28, and the Senate passed the bill by unanimous consent on June 3. President Donald Trump will now consider the measure.
Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, Congress allocated funds to the PPP to help small businesses keep workers on their payrolls. Lawmakers from both sides of the aisle supported making changes to the PPP to address complaints from employers that the existing rules are unfeasible.
The key provisions include:
- Extends the time period in which borrowers must spend their PPP loans from 8 weeks to 24 weeks.
- Lowers the percentage of loan proceeds that must be spent on payroll from 75 to 60 percent.
- Extends the loan coverage period from June 30 to December 31, 2020.
- For the portion of the loan that isn’t forgiven, the measure extends the loan term from 2 years to 5 years.