House passes changes to Paycheck Protection Program

In a near unanimous vote, the House of Representatives today passed the Paycheck Flexibility Act (H.R. 7010) to allow more leeway for small business loans during the COVID-19 crisis. The bipartisan bill extends the loan period to up to 24 weeks through Dec. 31, 2020, as well as the timeframe for repayment (if required). It also changes the parameters for potential loan forgiveness.

Most notably, borrowers may use up to 40% of the loan on non-payroll expenses, and the bill provides different scenarios under which borrowers may be eligible for forgiveness even if they are unable to retain or reinstate the same number of full-time equivalent employees. It also allows PPP loan borrowers who seek forgiveness of the loan to qualify for deferred payment of the employer’s portion of certain payroll taxes.

The AHA May 26 sent a letter to bill sponsor Rep. Chip Roy, R-Texas, in support of the act.