The House on Thursday passed bipartisan legislation to provide struggling small businesses with more flexibility while using loans provided through the Paycheck Protection Program, in the latest effort by lawmakers to help limit the economic impact of the coronavirus pandemic.
The bill passed easily by a vote of 417-1.
The legislation expands the terms of the loans from the Paycheck Protection Program, which was created by the $2.2 trillion coronavirus relief package that Congress and the Trump administration enacted in late March.
But lawmakers say that additional changes to the program are needed following complaints from small businesses that they’re not able to take advantage of the loans under the current terms, particularly those that still face coronavirus-imposed safety restrictions. They are not in a position to rehire all their employees in the time currently required to qualify for loan forgiveness.
The bill would give small businesses up to 24 weeks, up from the current eight weeks, to use the loans and extend the deadline for rehiring workers from June 30 to the end of this year.
It would also allow small businesses to spend more of the money on non-payroll costs. The current terms of the loans require recipients to use 75 percent of the funds on payroll and up to 25 percent on other costs to qualify for loan forgiveness. But the legislation would change the ratio to at least 60 percent on payroll and up to 40 percent on rent, overhead and other costs.
The bill now heads to the Senate, which left for its Memorial Day recess last week before taking action on its own version of legislation to make changes to the small business loans.
The Senate version is largely similar to what the House has passed, but it only extends the timeframe for small businesses to spend the funds to 16 weeks instead of 24.
Source: The Hill