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May 28, 2020 at 05:24 PM
House lawmakers passed Wednesday afternoon the Paycheck Protection Program Flexibility Act of 2020, H.R. 7010, which extends several deadlines for small businesses who received PPP loans.
H.R. 7010 does the following:
- Allows forgiveness for expenses beyond the 8-week covered period to 24 weeks and extends the rehiring deadline;
- Increases the current limitation on non-payroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25% to 40%;
- Extends the program from June 30 to Dec. 31;
- Extends loan terms from two to five years; and
- Ensures full access to payroll tax deferment for businesses that take PPP loans.
Rep. Dean Phillips, D-Minn., who sponsored the legislation with Rep. Chip Roy, R-Texas, said in a Thursday tweet that “with a 471-1 vote, the PPP Flexibility Act is a proven winner and the Senate should pass it without delay. Good policy and good representation begin with listening – this is what small businesses are telling us they need to survive.”
As for extending the deadline to apply for a PPP loan to Dec. 31 from June 30, Leon LaBrecque, chief growth officer at Sequoia Financial Group in Troy, Michigan, told ThinkAdvisor Thursday that while the extension is nice, “but again, what about those businesses that needed it, used it and followed the old rules?”
LaBrecque said the bill would also require at least 60% of forgiven loan amounts to come from payroll expenses, which is an “acceptable change.”
