Congressman C.A. Dutch Ruppersberger (D-MD) voted in favor of bipartisan legislation improving the Payroll Protection Program (PPP), the loan forgiveness program created for small businesses in response to the COVID-19 pandemic. The bill passed the U.S. House of Representatives by a vote of 269-147 and now heads to the U.S. Senate for consideration.
The PPP was originally created by Congress under the CARES Act passed in April and provides businesses with a loan that converts to a grant as long as they use it by June 30 and spend at least 75 percent of the funds received on payroll. The rest can be used on other expenses such as rent and utilities.
“I’ve heard from many small business owners who are not applying for the program – even though they need it ― because they can’t meet the current requirements for making the loan forgivable,” Congressman Ruppersberger said. “Others have received PPP loans but are afraid to use the money because of these one-size-fits-all rules.”
The Payroll Protection Program Flexibility Act provides greater flexibility by:
● Allowing loan forgiveness for expenses beyond the 8-week covered period to 24 weeks and extending the rehiring deadline;
● Increasing the current limitation on the use of loan proceeds for non-payroll expenses from 25 percent to 40 percent;
● Allowing businesses to repay loans over five years instead of two;
● Ensuring full access to payroll tax deferment for businesses that take PPP loans to provide businesses with liquidity.