adminOn Thursday, the U.S. House of Representatives passed bipartisan legislation to provide struggling small businesses with more flexibility while using loans provided through the Paycheck Protection Program (PPP), in the latest effort by lawmakers to help limit the economic impact of COVID-19.
The bill, passing by a vote of 417-1, would give small businesses up to 24 weeks, (up from the current eight weeks) to use the loans and extend the deadline for rehiring workers from June 30 to the end of this year.
It would also give small businesses the choice to spend more of the money on non-payroll costs. The current terms of the loans require recipients to use 75 percent of the funds on payroll and up to 25 percent on other costs to qualify for loan forgiveness. But the legislation would change the ratio to at least 60 percent on payroll and up to 40 percent on rent, overhead and other costs.
This bill does not address the issue of allowing credit unions to borrow funds under the PPP, an issue the LSCU Advocacy Team continues to lobby Congress and the Small Business Administration to address.
The Senate has its own version of this bill, and while it slightly differs from what just passed the House, there are many similarities. Lawmakers do not expect this to be the last PPP or COVID-19 related legislation.
If you have any questions, please do not hesitate to reach out to LSCU President Jared Ross@lscu.coop.
