WASHINGTON–The Senate on Wednesday night passed a Paycheck Protection Program reform bill already passed by the House. It will now go to President Trump for his signature.
The legislation gives business owners more flexibility and time to use loan money and still qualify for loan forgiveness as part of the PPP.
"We can't wait any longer. Businesses are really suffering for lack of these changes," Senate Minority Leader Chuck Schumer (D-NY) said prior to the bill’s passage. “We must get this done. Businesses are going under every day."
The bill had passed the House on a 417-1, vote with Republican Rep. Thomas Massie of Kentucky the only member to vote against it.
The legislation, officially known as the Paycheck Protection Program Flexibility Act, was introduced by Chip Roy (R-TX) and Rep. Dean Phillips (D-MN).
The legislation would give small businesses more time to use emergency loans under the program by extending the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks.
The bill would also give small businesses more flexibility by changing the so-called 75/25 rule, which requires recipients of funds under the program to use three-quarters of the money for payroll costs and to limit other costs to no more than 25% in order to be eligible for loan forgiveness. The new ratio would be at least 60% on payroll and no more than 40% on other costs.
As CUToday.info has reported, both recipients of PPP funds and lenders such as credit unions have expressed concerns over issues related to complying with the forgiveness provisions of the program. More than $600 billion in PPP loans have been made to date in response to the coronavirus pandemic.