The U.S. Senate passed a bill Tuesday (June 3) amending the way the Paycheck Protection Program (PPP) works, extending the time for small- to medium-sized businesses (SMBs) to use the money from eight weeks to 24 weeks, CNN reported.
It also gives business owners more flexibility on how much has to go toward payroll. Prior to the passage of this bill, PPP recipients had to spend 75 percent of the money on employee pay in order to get the loans forgiven. The bill lowers that number to 60 percent, with no more than 40 percent used for other costs.
The bill, titled the Paycheck Protection Program Flexibility Act, was introduced by Reps. Chip Roy of Texas and Dean Phillips of Minnesota. It was passed by the House of Representatives last week and will now go to the desk of President Donald Trump.
It was the subject of some contention earlier in the day on Tuesday when Sens. Ron Johnson and Mike Lee, contested the extensions of the bill, saying they believed the PPP should be short-lived rather than ongoing.
But both of them relented eventually. Johnson went ahead after getting a letter entered into the record clarifying the authorization period, CNN reported.
Senate Minority Leader Chuck Schumer said he believed it was imperative to get the bill passed.
“We can’t wait any longer,” Schumer said earlier in the day on the Senate floor, according to CNN. “Businesses are really suffering for lack of these changes. We must get this done. Businesses are going under every day.”
The bill passed by a margin of 417-1, with Rep. Thomas Massie of Kentucky the sole outlier voting against it.
Two banking groups, the Consumer Bankers Association and the Bank Policy Institute, have called for all loans less than $150,000 to be forgiven in an attempt to relieve SMB owners of the stresses and time-consuming paperwork of applying for the forgiveness.