House to Vote on More-Flexible Small Business Loan Program

 

House to Vote on More-Flexible Small Business Loan Program

More than 50% of small business owners want to have their PPP money forgiven, a survey finds. 

NACS | May 22, 2020

WASHINGTON—The U.S. House is expected to vote next week on altering the Paycheck Protection Program (PPP) to provide more flexibility to small businesses impacted by the coronavirus pandemic, USA Today reports. The changes will help struggling companies stay afloat and keep workers on the payroll as pandemic closures continue. The U.S. Senate is expected to support the measure.

Reps. Chip Roy and Dean Phillips sponsored the proposal which would lengthen the time businesses would have to bring workers back later than the initial June 30 deadline. The bill would also give more time for the loan forgiveness period because some companies will not be able to reopen as fast as others.

In addition, the proposal would provide more flexibility in how they spend the money because many can’t spend 75% on their payroll within the eight-week period original specified in PPP. “These common-sense solutions will provide the flexibility necessary to weather the storm and prepare for uncertain times ahead,” said Phillips.

Meanwhile, a recent survey found that more than 50% of small businesses are interested in PPP fund forgiveness, CNBC reports. The National Federation of Independent Business survey showed frustrations mounting because of a lack of clarity from the Small Business Administration (SBA) on how to use PPP funds in order to receive loan forgiveness.

Small business owners with PPP loans say the requirements for loan forgiveness are challenging and confusing, including the eight-week window for compliance. Both the U.S. Treasury Department and the SBA provided a forgiveness application last week for borrowers and indicated additional clarification would be coming for borrowers and lenders.

“Owners have questions about how to spend the funds and what they can spend the loan on as many of the terms and conditions are broad and unclear when applied to specific business operations. Nearly three-fourths of small business borrowers find the terms and conditions of the PPP loan difficult to understand with 22% finding them very difficult,” the report said.

 

Source: NACS