As an update on legislation passed by the House last week to improve the Paycheck Protection Program, which offers small businesses emergency loans during the COVID-19 pandemic, Bloomberg reported that the bill passed the Senate on Wednesday through an expedited process known as unanimous consent. ANCOR advocated for the legislation, including joining five other disability provider organizations in a letter urging U.S. Senators to support the legislation.
“The Senate cleared changes to the popular Paycheck Protection Program on Wednesday that will allow small businesses more flexibility in using the rescue loan funds. The bill, passed the House last week on a 417-1 vote […]
The coronavirus program provides forgivable loans to help small businesses make their payrolls during the Covid-19 crisis. The bill would extend an eight-week period — when proceeds must be spent for loans to be forgiven — to 24 weeks or until the end of the year, whichever comes first.
Businesses would also have as long as five years, instead of two, to repay any money owed on a loan, and they could use a greater percentage of proceeds on rent and other approved non-payroll expenses. [ANCOR note: specifically, the bill states 60 percent of the loans must be used on wages rather than the original 75 percent.]
Timing is urgent because the eight-week spending period began expiring last Friday for the first loan recipients after the Small Business Administration program opened April 3. Businesses — especially in the restaurant and hospitality industry, which are only recently getting the green light to reopen — say they need more time to distribute pay.
As of Wednesday night, SBA reported that 4.5 million firms had received approvals for loans totaling $510.6 billion. About $130 billion remains from the second round of $320 billion that Congress approved for PPP. The initial round of $349 billion was tapped in just 13 days.
Small business advocates hailed passage of the bill as providing needed flexibility to firms still struggling to emerge from COVID-related closings, even as lenders and other groups are still seeking other program changes they hope Congress can make in the coming weeks.”
Politico Pro further reported that: “Trump signed the legislation at a White House event in which he lauded the Labor Department report earlier today that the unemployment rate unexpectedly dropped in May and the economy added more than 2 million jobs.
But the new law is by no means the last major change in store for the program, which has been subject to an evolving set of rules since the Small Business Administration and Treasury Department hurriedly launched it on April 3. There is growing pressure on Congress and the Trump administration to further revamp the program, including streamlining the process that businesses must go through in the coming weeks and months to convert the loans into grants.”