Whitehouse Applauds PPP Fixes, Calls for Simplification of Loan Forgiveness Process for Small Businesses
Senate sends bill to President’s desk to better align PPP with needs of small businesses
Washington, D.C. – U.S. Senator Sheldon Whitehouse (D-RI) today applauded Senate passage of legislation to better align the Paycheck Protection Program (PPP) with the needs of small businesses, and called for additional changes to the program to simplify the loan forgiveness process for small borrowers. The Paycheck Protection Program Flexibility Act now awaits the President’s signature to be signed into law.
“Congress has taken a significant step to fine-tune the Paycheck Protection Program to better align it with the needs of struggling Main Street businesses,” said Whitehouse. “There is more work to be done to ensure owners of independent restaurants, shops, and other small enterprises can get their PPP loans forgiven without incurring additional costs or getting bogged down in red tape.”
The Paycheck Protection Program Flexibility Act, which was unanimously approved by the U.S. Senate last night, makes a number of improvements to the PPP:
· Extends the PPP loan forgiveness period from eight weeks to 24 weeks.
· Permits PPP loan recipients to spend 60 percent, rather than 75 percent, of loan proceeds on paying workers, allowing small business owners to meet more overhead expenses.
· Increases the loan repayment period from two to five years for new loans.
· Allows payroll tax deferral for PPP recipients.
· Extends the June 30 rehiring deadline.
In addition, Whitehouse today joined U.S. Senators Tammy Duckworth (D-IL) and Ed Markey (D-MA) in sending a request to the U.S. Small Business Administration and U.S. Department of the Treasury to implement a streamlined Paycheck Protection Program loan forgiveness application and to reduce paperwork for borrowers with loans of $100,000 or less.
“We are concerned that the recently released guidance on loan forgiveness is too burdensome for the smallest businesses, and will be incredibly time-consuming and costly for microbusinesses, small businesses owned by people of color and sole proprietorships who would have to hire accountants and other consultants just to apply for forgiveness,” the Senators wrote. “Further, we worry that this complexity is likely to discourage the smallest businesses still in need of funding from applying for much needed aid.”
Congress created the Paycheck Protection Program in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and appropriated a total of $659 billion for the program, which was intended to be a lifeline for small businesses and workers. PPP offers forgivable small business loans to cover payroll and overhead costs.