Senate approves House-passed Paycheck Protection Program reform bill

Senate approves House-passed Paycheck Protection Program reform bill

The U.S. Senate finally did its job last night, providing greater flexibility to the millions of small businesses that received loans via the Paycheck Protection Program.

The legislation, passed by the House on May 28, now heads to President Donald Trump's desk.

Sen. Ron Johnson (R-Wis.) yesterday blocked an initial attempt at unanimous consent, but then got a (still-unreleased) letter clarifying that a related program extension to December 31 only applies to spending instead of to applications. It also amends a Small Business Administration (SBA) requirement that borrowers use at least 75% of the funds on payroll in order to be eligible for loan forgiveness. Businesses receiving PPP must also certify that they need it to keep operating, a requirement that makes some business owners cautious about applying.

Utah Senator Mike Lee had also objected to language that he and Johnson said would lengthen the application deadline.

It is not yet clear if all senators will agree to the bill without changes.

Johnson said Republicans are hoping to get top lawmakers to sign onto a nonbinding letter to the program's overseers seeking to clarify some of the rules governing the program.

According to the NFIB survey, 77 percent of small business owners had applied for a PPP loan, of which 93 percent had been approved.

For loans that must be repaid, borrowers now have five years instead of two.

There was dispute about a provision of the House bill that extends a June 30 rehiring deadline. Sen.

While the government is working on potentially making the program's terms more flexible, the CARES Act stipulated that the loan had to be used within 8 weeks of its deposit - and 75 percent of the cash had to be put toward payroll expenses.

"Instead, the employer is saddled with a debt for the entire amount, and no portion of the loan is forgiven or converted to a grant", Collins said.

The Treasury and the SBA haven't responded to requests for comment. New PPP loan approvals have stalled with about $130 billion remaining in the second round of funding because loans are being canceled. In April, Congress approved an additional $310 billion so that more companies could receive funding. The initial round of $349 billion was tapped in just 13 days. "I will continue advocating for programs that support small businesses in Hawaii and across the country during this public health and economic crisis".

"Congress deserves credit for removing barriers that could slow recovery further", the chamber said in a statement. "And today, we are passing another piece of legislation that makes a few targeted changes to the program".



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