05/29/2020 | Press release | Distributed by Public on 05/29/2020 15:11
The U.S. House of Representatives recently passed H.R. 7010: The Paycheck Protection Program (PPP) Flexibility Act. Since the House is not is full session the bill passed under special rules established to expedite legislation. The rules require a two-thirds vote for passage instead of a simple majority.
The newly passed bill will make it easier for small businesses and other recipients of the PPP funding to qualify for forgiveness of the loans. The bill increases the ability for small businesses to have their PPP loan fully forgiven and will change forgiveness compliance.
The former legislation had an inherent lack of flexibility which created unnecessary challenges when small businesses signed up for PPP funding.
H.R. 7010 extends the time for PPP recipients to spend their funds from eight weeks to 24 weeks. The proportion of the loans that must be spent on payroll costs was lowered to 60% from the previous 75%, allowing more businesses to qualify for the full forgiveness of the loan. This also allows the borrowers to use more funds for other costs such as rent and utilities.
The bill also increases the minimum term period for the loans from two years to five years. This will allow small businesses whose loans are forgiven to delay the payment of payroll taxes.
Currently, there is a similar bill that is close to a vote in the Senate. This bill would double the coverage period of PPP spending to 16 weeks. However, the bill would not change the 75% payroll cost requirement.
When the Senate bill comes closer to a resolution and is voted on, AZFB will release additional information to the membership as to what to expect going forward.
If there are further questions about funding or access to PPP loans, please reach out to the government relations team or visit the COVID-19 Resources Page at www.azfb.org. Click on Public Policy, then scroll to Resources and Links.