05/29/2020

House Passes Bill Easing Restrictions on PPP Loans

Now the Senate must approve it

On May 28, the House voted 417-1 to pass legislation that will make urgently needed changes to the Paycheck Protection Program (PPP), created to assist small businesses struggling during the ongoing COVID-19 pandemic.

The Paycheck Protection Flexibility Act, introduced by Reps. Chip Roy (R-TX) and Dean Phillips (D-MN), is designed to make PPP loans more accessible by making its terms of use more flexible. Importantly, the bill does not expand eligibility for the PPP to include 501(c) associations as the House-passed HEROES Act does.

The legislation would give small businesses more time to use loans under the PPP by extending the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks. The bill also gives PPP recipients more flexibility by changing the 75/25 rule, which requires fund recipients to use 75 percent of the money for payroll costs in order to be eligible for loan forgiveness. The new ratio would be at least 60 percent on payroll and no more than 40 percent on other expenses.

Please select this link to read the complete article from Associations Now.