(PatrioticPost.com)- While a full-blown fourth coronavirus relief package may still be a ways off, Senate leadership is hoping to take swift action to support one of the programs created by the last package.
Senate Majority Leader Mitch McConnell said Monday he hopes the full Senate passes legislation that would ease the terms of the Paycheck Protection Program. The House of Representatives already passes the bill by an overwhelming majority.
“I hope and anticipate the Senate will soon take up and pass legislation that just passed the House, by an overwhelming vote of 417 to 1, to further strengthen the Paycheck Protection Program so it continues working for small businesses that need our help.”
The major change to the PPP the House passed would significantly extend the amount of time businesses would have to use the funds of the loan to operate and retain employees. Originally, the language of the PPP said these businesses had only eight weeks to use the funds. The new language would be updated to allow them 24 weeks to use the funds.
Other provisions in the bill would give more flexibility in the program. Examples include reducing the amount of money that needs to be spent on payroll to 60% (from 75%) in order to have the loan forgiven. That means that now 40% of the funds can be used on other expenses such as mortgage payments, rent, loan interest and utilities.
Companies that receive PPP loans would also now have until December 31 to re-hire any workers they laid off or furloughed due to the coronavirus pandemic. Originally, they only had until June 30 to do so. Companies would also have more leeway to have their loan forgiven if they can prove they couldn’t re-hire some workers because of safety standards when trying to re-open.
Until the bill passes the full Congress and is signed by President Donald Trump, though, the forgiveness portion of the program will follow the new guidelines released by the Treasury Department on May 22. And figuring out what you have to do as a business to have the loan forgiven, and how you have to do it, is not easy, to say the least.
The new Treasury rules say the Small Business Administration now has the authority to review a PPP loan at any time, to assess whether the borrower could get “credit elsewhere” or has enough “liquidity” that they don’t need a loan. The regulation reads:
“For a PPP loan of any size, SBA may undertake a review at any time in SBA’s discretion. For example, SBA may review a loan if the loan documentation submitted to SBA by the lender or any other information indicates that the borrower may be ineligible for a PPP loan, or may be ineligible to receive the loan amount or loan forgiveness amount claimed by the borrower.”
On top of that, the process of having loan proceeds forgiven could take up to five months. The bank has 60 days to review a forgiveness request, and then the SBA has another 90 days to review a bank’s approval.