House of Representatives Passes Two Bills to Improve PPP

The House of Representatives passed H.R. 7010, the Paycheck Protection Program Flexibility Act, on May 28. The legislation is written to improve the Paycheck Protection Program (PPP) by providing small businesses with greater flexibility when utilizing PPP loans.

It remains uncertain whether the Senate will pass the House bill or a different version. Senate Small Business Committee Chairman Marco Rubio (R-Fla.) has said the Senate is leaning toward making changes to the House bill when they return from recess this week.

The Window & Door Manufacturers Association provided a summary of the Paycheck Protection Program Flexibility Act:

• Changes the program sunset date from June 30, 2020, to Dec. 31, 2020.
• Allows forgiveness for expenses beyond the 8-week covered period to 24 weeks.
• Increases the current limitation on non-payroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent.
• Lengthens the loan maturity date from 2 to 5 years.
• Ensures full access to payroll tax deferment for businesses that take PPP loans.
• Extends the loan forgiveness rehire date to Dec. 31, 2020, to ensure small businesses won’t be penalized by high unemployment benefits.
• Creates a safe harbor for businesses that make a good-faith effort to hire or re-hire qualified employees.
• Allows borrowers who received PPP loans prior to enactment to choose for the covered period of their loan to either last 8 weeks or 24 weeks from origination.

The House also passed H.R. 6782, the Truth Act, which would require the Small Business Administration to identify borrowers with loans above $2 million and explain the decision-making process, including for both PPP and Economic Injury Disaster Loans above this amount. The bill also requires disclosure of assistance to socially and economically disadvantaged small business owners and women- and veteran-owned businesses.