(AmericanProsperity.com) – Small businesses hoping to get easier access to forgivable loans through the Paycheck Protection Program (PPP) are not in luck. New legislation passed 417-1 in the House of Representatives on Thursday didn’t do any favors to those who still need emergency funds. However, if you’re one of the fortunate ones to get a loan, there are some meaningful reforms in the bill.
For example, the bill reduces the amount businesses are required to spend on payroll from 75% to 60%. That means 40% can now be used on operating expenses like rent and utilities.
#NEW House Democrats are to pass legislation that extends the PPP spending window for small business owners. Those eligible can spend the PPP money for up to 24 weeks.
Treasury Sec @stevenmnuchin1 said this will grant more flexibility for non payroll expenses.
— Dana Alexa (@DanaAlexaNews) May 28, 2020
Some small businesses say they’re having a difficult time getting people making more from unemployment payments to return to work. Democrats are hesitant to fix that issue. Instead, they extended the rehire period to June 30, 2020, in order to allow business owners to receive loan forgiveness.
Additionally, if a business doesn’t get forgiveness on the loan, the legislation extends the time to use the funds from 8 weeks to 24 weeks. It also extends the payback period beyond the initial two-year term.
The initial PPP was authorized as part of the CARES Act in late March. Two weeks ago, the House included this legislation as part of their HEROES Act that was passed along party lines. The bill stalled in the Republican-led Senate, which said the Liberal wish-lists were dead on arrival. The House passed the bipartisan bill to help small businesses immediately. Now, this bill heads to the Senate once again.
~Here’s to Your Prosperity!
Copyright 2020, AmericanProsperity.com