Source: United States House of Representatives – Congressman Brad Wenstrup (OH-02)
Wenstrup-Backed Bill to Help Small Businesses Access PPP Loans Passes House
WASHINGTON, D.C.—Today, the U.S. House of Representatives passed the Paycheck Protection Program Flexibility Act of 2020, which Congressman Brad Wenstrup (OH-02) cosponsored.
“As we begin to restart and rebuild our economy, we want to ensure that small businesses can fully utilize the Paycheck Protection Program. This commonsense bill fine–tunes our previous work to meet the unique needs of many employers, ensuring they can reopen safely and smartly. I’m proud to cosponsor this legislation and urge the Senate to consider it immediately,” said Congressman Wenstrup. Background on H.R. 7010 from the House Small Business Committee:The Paycheck Protection Program Flexibility Act:Extends the forgiveness period to 24 weeks.While small businesses in many parts of the country have begun to safely reopen, some remain closed and others must abide by strict capacity limitations.Extending the covered period from 8 weeks to 24 weeks accommodates businesses in many stages of reopening.Small businesses that prefer to stay within the original 8-week window can opt-out of the extension.Extends deferment window to end once the Small Business Administration (SBA) makes the forgives payment to the lender on the borrower’s behalf.Replaces the 75/25 rule with a 60/40 rule.The current rule requires that 75 percent of the loan must be used on payroll costs and 25 percent to be used on mortgage interest, rent, and utilities. Failure to adhere to this rule impacts loan forgiveness.Adjusting this rule gives small businesses more choice in how they use their loan funds more effectively.All new PPP loans will receive a 5-year maturity. Existing loans will remain at a 2-year maturity.As small businesses continue to recover from the economic impact of COVID-19, extending the loan maturity gives them more time to rebuild their businesses.Allows businesses that receive forgiveness to also receive payroll tax deferment.Ensures small businesses won’t be penalized by high unemployment benefits.To receive loan forgiveness, a business must rehire employees by December 31, 2020.Unfortunately, higher unemployment benefits have discouraged some employees from returning to work, a situation Congress must work to remedy.Businesses that make a good faith effort to rehire will satisfy headcount requirements for the purposes of forgiveness.Creates a safe harbor for businesses that are required to open at only 50 percent capacity.
In addition to cosponsoring H.R. 7010, Congressman Wenstrup has led a bipartisan group of his colleagues in asking congressional leadership and the Trump administration to provide additional flexibility for small businesses who access PPP funding.MIL OSI USA News –