U.S. Reps. Dave Joyce (R-OH), John Katko (R-NY), and Troy Balderson (R-OH) applauded passage on May 28 of the Paycheck Protection Program (PPP) Flexibility Act of 2020 to help small businesses impacted by the COVID-19 pandemic.
The U.S. House of Representatives voted 417-1 to pass H.R. 7010, which would amend the Small Business Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act to modify certain provisions related to the forgiveness of loans under the PPP, and to allow recipients of loan forgiveness under the PPP to defer payroll taxes.
“The Paycheck Protection Program was designed to help Ohio’s small businesses stay afloat during this pandemic, yet in some ways it has harmed these businesses,” said Rep. Balderson, who co-authored H.R. 7010. “Their comeback, just like our country’s as a whole, cannot happen overnight. Small business owners need increased flexibility: to decide how they’ll spend the money from these loans and to use and repay them over longer periods of time.”
Rep. Katko called H.R. 7010 important legislation that “provides necessary enhancements to the PPP making it more accessible and responsive to the challenges facing central New York businesses.”
“While there’s no doubt that PPP has helped save millions of small businesses and jobs, it has not been a perfect program,” added Rep. Joyce. “Current PPP timeline requirements, such as the eight-week limit to spend the loan, severely limit businesses from taking full advantage of the loans that were meant to get them back on their feet.”
Such requirements have created great uncertainty for small businesses, especially restaurants and retail, that want to fully leverage the value of their loan so that they can continue to operate, Rep. Joyce said.
Rep. Katko agreed, saying that despite successes of the PPP, he has spoken with many business owners who are concerned that the current terms for PPP loans fail to address their unique circumstances or limit their ability to pay employees through the duration of the pandemic.
“In some cases, businesses that are in desperate need of assistance have yet to apply for PPP out of fear they won’t meet the loan terms,” said Rep. Katko.
If enacted, H.R. 7010 would extend the covered period for forgivable PPP loans from eight weeks to 24 weeks; ensure employers who make good-faith efforts to rehire workers, but are ultimately unsuccessful, remain eligible for PPP loan forgiveness; and replace the current rule that requires 75 percent of the loan to be used on payroll costs and 25 percent to be used on mortgage interest, rent and utilities with a rule that allows 60 percent to be used on the former and 40 percent to be used on the latter. The bill also establishes that PPP loans issued in the future have a five-year maturity, as opposed to two years, among other provisions.
“I urge my colleagues in the Senate to act quickly so we can get this important legislation to the president’s desk to be signed into law as soon as possible,” Rep. Joyce said. “I will continue to do everything in my power to equip our small businesses with the tools and resources they need to weather this storm, safely reopen and continue their role as an integral part of the Buckeye economy.”
Rep. Katko also urged fast action on the bill.
“The PPP has offered small businesses an important lifeline, enabling millions of businesses to remain afloat during this crisis. To ensure this program is accessible and responsive to the needs of Central New York small businesses, we need the Senate to swiftly take up and pass the Paycheck Protection Program Flexibility Act,” he said.