The House of Representatives voted to pass legislation making changes to the Paycheck Protection Program (PPP). The legislation, called the Paycheck Protection Program Flexibility Act, would provide employers additional flexibility in the PPP and make loans more accessible. The Senate would need to pass the legislation to implement the changes.
The legislation would change the PPP sunset date from June 30 to December 31 and allow forgiveness for expenses beyond the eight-week covered period to 24 weeks. The Act also would increase the current limitation on non-payroll expenses for loan forgiveness from 25% to 40% and lengthen the loan maturity date from two to five years. The legislation would ensure full access to payroll tax deferment for companies that take PPP loans, would extend the loan forgiveness rehire date to December 31, and would create a safe harbor for businesses that make a good-faith effort to hire or re-hire qualified employees. Additionally, under the proposed legislation, borrowers who received PPP loans prior to enactment of the Paycheck Protection Program Flexibility Act would be able to choose whether the covered period of their loan lasts eight weeks or 24 weeks.
The National Lumber and Building Material Dealers Association (NLBMDA), one of 55 outside organizations to express support of the Paycheck Protection Program Flexibility Act, applauded the House’s approval of the legislation.
“NLBMDA applauds the House of Representatives for hearing the concerns of our dealer members and passing bipartisan legislation to improve the Paycheck Protection Program for small businesses,” said Jonathan Paine, President and CEO of the NLBMDA. “Providing greater flexibility for PPP will ensure more small businesses are able to effectively utilize the program to help weather the economic downturn caused by the pandemic. NLBMDA calls on the Senate to swiftly pass this legislation and work with the House on a broader Phase 4 relief package that fully addresses the needs of small businesses.”
Under the PPP, small businesses–companies with 500 employees or fewer–can apply for partially forgivable loans that can cover operating expenses. Originally allocated $349 billion as part of the CARES Act, funding for the PPP ran out within two weeks. The government was quick to approve a bill including an additional $310 billion for the PPP.
