Guthrie Votes to protect small businesses
Congressman Brett Guthrie (KY-02) this week voted in favor of the Paycheck Protection Program Flexibility Act (H.R. 7010).
The Paycheck Protection Program (PPP) was initially established in the CARES Act to help small businesses continue to pay employees during the coronavirus pandemic.
The PPP originally provided eight weeks of cash-flow assistance and required that businesses use 75% of the loan on payroll costs to be eligible for loan forgiveness.
The Paycheck Protection Program Flexibility Act would extend the forgiveness period from eight to 24 weeks to accommodate businesses in various stages of reopening, and it would lower the payroll requirement to 60% of the loan.
“As the PPP is being used by small businesses around the country, it has become clear that businesses have differing needs,” said Guthrie. “Sadly, many businesses will not be able to fully reopen within eight weeks, and others may not costs unrelated to payroll that they need to keep their businesses afloat. The bipartisan PPP Flexibility Act will allow these businesses to stay open during this trying time. I urge the Senate to pass this commonsense legislation as soon as possible.”
Guthrie voted to establish the PPP in the CARES Act, as well as to extend funding for it in the PPP and
Specifically, the PPP Flexibility Act would:
Extend the forgiveness period from 8 weeks to 24 weeks, accommodating businesses in many stages of reopening.
Small businesses that prefer to stay within the original 8-week window can opt-out of the extension.
Extends the deferment window to end once the SBA makes the forgiveness payment to the lender on the borrower’s behalf.
Replace the 75/25 rule with a 60/40 rule.
The current rule requires that 75% of the loan must be used on payroll costs and 25% to be used on mortgage interest, rent, and utilities. Failure to adhere to this rule impacts loan forgiveness.
Adjusting this rule gives small businesses more choice in how they use their loan funds.
All new PPP loans will receive a 5- year maturity. Existing loans will remain at a 2-year maturity.
As small businesses continue to recover from the economic impact of COVID-19, extending the loan maturity gives them more time to rebuild their business.
Allow businesses that receive forgiveness to also receive payroll tax deferment.
Ensure small businesses won’t be penalized by high unemployment benefits.
To receive loan forgiveness, a business must rehire employees by December 31, 2020.
Higher unemployment benefits have discouraged some employees from returning to work.
Businesses that make a good faith effort to rehire will satisfy headcount requirements for the purpose of forgiveness,
Create a safe harbor for businesses that are required to open at only 50% capacity.