Small businesses will likely now have more flexibility to use Paycheck Protection Program loans after the Senate unanimously approved a House bill to amend rules of the program late Wednesday. The bill now goes to President Trump to be signed into law.
The bipartisan bill, entitled the Paycheck Protection Program Flexibility Act and spearheaded by Democratic Rep. Dean Phillips and Republican Rep. Chip Roy, makes several changes to the program. Those include: extending the timeframe to use funds from eight weeks to 24 weeks, and requiring businesses to use 60% of the funds on payroll (before, it was 75%, which some small businesses said was a struggle as employees are unable to return to work amid shutdowns). Additionally, the bill now gives small business owners until December 31 to rehire employees to qualify for full forgiveness. Small businesses will also now have five years to repay loans instead of two, and the bill allows businesses to defer payroll taxes. The 1% interest rate on the loans remains the same.