House passes bill giving firms more time to use PPP loans
WASHINGTON — The U.S. House of Representatives voted almost unanimously Thursday to give businesses more time to spend funds disbursed through Small Business Administration's Paycheck Protection Program.
House lawmakers voted 417-1 to advance the Paycheck Protection Program Flexibility Act, which triples the period to 24 weeks during which businesses can spend their PPP loan amounts. The legislation would also lower the threshold for how much of the funds must go toward payrolls, from 75% to 60%, in order for a PPP loan to be forgiven.
“I think we can all agree the economic crisis brought on by Covid-19 has proven more severe and drawn out than many anticipated,” said Rep. Nydia Velazquez, D-N.Y., who chairs the House Small Business Committee. “The extended nature of the economic downturn has made it necessary to enact certain legislative reforms to the programs. … The new 60-40 ratio makes certain a business can remain open, weather the crisis, continue employing workers and keep serving their local communities.”
The legislation comes after small businesses pushed to be able to use more PPP funds for purposes other than payroll.
The National Federation of Independent Business urged lawmakers in a letter to pass the legislation.
“These changes will allow more businesses to receive PPP loan forgiveness and have liquidity after the PPP ends,” said Kevin Kuhlman, vice president of federal government relations at the federation.
The legislation is due to be considered as early as next week in the Senate, where the strong bipartisan support for the measure in the House may help its chances. The House recently passed a separate $3 trillion coronavirus relief package, but its chances to become law are less clear.