Proposed Changes to PPP Program Pass First Congressional Hurdle
The House passed the Paycheck Protection Program (PPP) Flexibility Act (HR 7010) on May 28th with an overwhelming bipartisan vote. The Bill was sponsored by Rep. Chip Roy (R-TX) and included a few key changes:
- Extending loan repayment period from 2 to 5 years;
- Extending the Covered Period to 24 weeks or December 31, 2020 (which means any loan funded by July 17, 2020);
- Revising the percentage of forgivable spend on non-payroll costs; and
- Allowing payroll tax deferrals even with loan forgiveness.
It is important to note that passage of the law in the House does not mean these changes have become the law. Ultimately, the Senate will need to take up the matter, approve it and forward to the President for signature. Until those steps are taken, the PPP program and guidance remain unchanged despite the House bill.
The Senate is currently considering several bills to amend PPP, so the details of what, if anything, ultimately gets signed into law may change.
In addition, the House generally voted along party lines against the Public Disclosure of COVID Recovery Loans (Truth Act, HR 6782) that would have required the SBA to publish significant identifying information about borrowers and lenders.
We continue to monitor the ongoing PPP legislative proposals and will provide updates as they arise.