A bipartisan bill (H.R. 7010) passed the House of Representatives yesterday intended to loosen the compliance requirements on Paycheck Protection Program (PPP) loans. The bill will affect hundreds of billions of dollars in small-business loans made under the PPP and is in response to concerns from employers struggling to stay open during the COVID-19 pandemic. The House legislation is strongly supported by various business groups who have pushed Congress for changes to the existing program, seeking more time for businesses to have the loans forgiven and paid off by the U.S. government.
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.
Future changes the PPP and in other areas will be posted as they become available.