Update 6/5: New Paycheck Protection Program Guidelines to Allow Spending Flexibility, Extend Rehiring Deadlines
This week, the Senate passed a bill that would change the way small businesses can spend federal loans they received during the COVID-19 pandemic, as well as extending deadlines relating to rehiring and loan forgiveness. Today, the president signed the legislation into law.
The legislation, amends the Paycheck Protection Program (PPP), giving small-business recipients the ability to spend 60 percent of the loan money on payroll instead of the previously mandated 75 percent. Also, these businesses could use the money for six months, rather than the original two months.
The bill would also extend the June 30 deadline to rehire workers and prolong the deadline to repay the loans, while allowing small businesses that receive loan forgiveness to defer their payroll taxes, according to CNBC.
This was a bipartisan effort after a frustrating back and forth throughout the previous iterations of the $2 trillion relief package introduced at the beginning of the pandemic in March.
After passing 47-1 in the House last week, the bill hit a setback in the Senate after it was opposed by Sen. Ron Johnson. But, after Senate Majority Leader Mitch McConnell re-introduced it, Sen. Johnson reportedly did not object to the bill.
The Senate passed the Paycheck Protection Program Flexibility Act, now on the way to @realDonaldTrump's desk. Small Businesses owners now have more flexibility on how they use their PPP loans, and are better able to support their businesses and employees through this pandemic.
— RepScottPerry (@RepScottPerry) June 4, 2020
With the fluid nature of the reopening stage, some original goals have been pushed back as new information and new outbreaks come about. This would give some businesses much needed relief and a longer window of time to get situated before their states or cities allow them to fully reopen with more staff. It would also allow them to use the financial relief on more than just paying employees, such as rent or other business expenditures necessary to keep the lights on.