House Passes Paycheck Protection Flexibility Act
The U.S. House of Representatives has passed the Paycheck Protection Flexibility Act, which has been modified by the Small Business Committee to address both Democratic and Republican concerns. It’s unclear if those changes will be enough to pass the Senate. After an unsuccessful hotline of a similarly focused bill in the Senate last week, there were rumors that the Senate could pass the House bill in one of its pro forma sessions later this week. That outcome is unlikely, as the Senate bill still has significant differences than the House bill. It is unclear which bill will move through both chambers or whether a conference will be necessary.
Highlights of the House bill (H.R. 7010) below. Updated text here.
Allows loan forgiveness for expenses beyond the 8-week covered period.
- Removes the limitation that restrict non-payroll expenses (rent, utilities) to 25% of the loan.
- Eliminates limitations that restrict loan terms to 2 years.
- Allows businesses that take PPP loans to be eligible for payroll tax deferment.
- Extends the rehiring deadline to align with the enhanced Unemployment Insurance to offset its effects.
- Clarifies safe harbor language, specifically that an “inability to return to the same level of business activity,” refers to compliance with HHS, CDC, OSHA standards or any other worker/customer safety requirement related to COVID-19.
- Allows borrowers to defer payments until SBA has made forgiveness determination.
Highlights of the Senate bill below. Text here. One pager here.
- Extends the deadline to apply for a PPP from 6/30/2020, to 12/31/2020;
- Allows borrowers a full 16 weeks to use funds, extending it from 8 weeks;
- Expands use of funds to include PPP and investments in safety for reopening;
- Clarifies the lender hold harmless provision.
UPDATED (June 4, 2020): On the evening of June 3rd, the Senate passed H.R. 7010 by unanimous consent. The bill is now headed to the White House, where the president is expected to sign it.