Senate Bill Would Double Time For PPP Loans

The U.S. Senate is on track to pass legislation that would double the time small- to medium-sized businesses (SMBs) have to use Paycheck Protection Program (PPP) loans, according to a Reuters report.

The PPP, crafted by Congress to help SMBs survive the financial losses of COVID-19, is part of the $2.2 trillion CARES Act. It provides a total of $659 billion in forgivable loans if certain conditions are met.

But SMBs have complained its requirement to spend 75 percent of the money on payroll and use it all in two months are impossible to meet.

The legislation, which must be approved by the House of Representatives and the president, would give SMBs more flexibility to use the funds, such as buying personal protective equipment (PPE) for workers and other improvements to their shops that would help control the spread of the virus, the news service reported.

The proposed changes would increase the time to use the cash to four months, up from two, and extend the deadline for applying for the loans until Dec. 31, from June 30.

The House version seeks a six-month time frame for using the loans, which can be converted to grants if SMBs meet all requirements.

Senators declined to rush the measure through the Senate on Thursday (May 21), which would have required the unanimous consent of all senators, Reuters reported. It’s unclear when the Senate vote will take place.

The House proposal emerged this week and while Republicans have rejected a second CARES Act package with a $3 trillion price tag, they have voiced support for the PPP changes.

“Businesses are starting to reopen their doors, and if they had a few more weeks they could rehire everybody,” Sen. Marco Rubio, chairman of the Small Business Committee, said during an American Enterprise Institute event Tuesday (May 19).