AFTER RELENTLESS ADVOCACY, SCHUMER ANNOUNCES BIPARTISAN SENATE PASSAGE OF CRITICAL REFORMS TO PAYCHECK PROTECTION PROGRAM & HELP TO UPSTATE SMALL BUSINESSES; SENATOR SAYS BILL BRINGS DESPERATELY NEEDED CHANGES & FLEXIBILITY FOR SMALL BUSINESSES
The PPP Reform Bill Unanimously Passed Senate, Giving Upstate Small Businesses Loan Period Extensions, More Flexibility In Using Funding For Overhead Expenses Like Rent, And Extends Rehiring Deadline To End Of 2020
Senator Tirelessly Advocated For These PPP Reforms, Says Bill Provides Flexibility And Relief To Small Businesses And Nonprofits Across Upstate New York Starting To Recover
Schumer: Small Business Loan Fixes Will Better Help Upstate Businesses Weather This Crisis & Begin Recovery
Following his continuous calls for reforms to the Paycheck Protection Program (PPP), U.S. Senate Minority Leader Charles E. Schumer announced the unanimous Senate passage of the Paycheck Protection Program Flexibility Act, a bipartisan bill that makes critical changes to PPP, including expanding the loan forgiveness period from 8 to 24 weeks, allowing small businesses greater flexibility in the use of funds for non-payroll expenses like rent and utilities, and setting a new rehiring deadline of the end of the year to allow small businesses to receive full forgiveness of their loan. Schumer explained that these reforms were absolutely necessary because the impact of the crisis is long-lasting and requires a program that recognizes the realities faced by small businesses that have a long road ahead to full recovery.
“These changes to the PPP program provide desperately-needed flexibility and relief to countless small businesses in Upstate New York,” said Senator Schumer. “We worked day and night to pressure and persuade senators on the other side of the aisle to urgently get this done, and not wait to provide relief. This deal gives small businesses a more discretion and a realistic timeline to deploy the assistance they received to bring back employees and keep the lights on.”
The Paycheck Protection Program Flexibility Act is especially important for New York, Schumer explained, because New York State tends to have higher rent and utility costs compared to the rest of the country.
The senator also stressed that the bill would not solve every problem in PPP and that more must be done to promote access for rural and minority-owned businesses and nonprofits struggling to get the help they need. Legislation like the HEROES Act, Schumer said, is still urgently needed to provide additional help not only for small businesses, but also for homeowners, renter, essential workers, medical facilities, local and state governments, and more.
The bill previously passed the House of Representatives 417-1 and following Senate passage was signed by President Trump last week.
Details on some of the main reforms in the Paycheck Protection Program Flexibility Act are provided below:
First, the Paycheck Protection Program Flexibility Act expands the loan forgiveness period from eight weeks to 24 weeks. Currently, workers may be brought back for the eight weeks, but then face a cliff after that short period and may be laid off again.
Second, the legislation removes the 25% restriction imposed by the Trump administration on the use of loans for fixed costs, like rent, mortgage, and utilities, and replaces it with a new 60-40 payroll to non-payroll breakdown in the use of the loan, allowing more flexibility for helping small businesses and nonprofits with all expenses to survive this crisis, which is essential to the long-term employment prospect of the workers.
Third, the proposal makes December 31st the deadline to rehire workers in order to get full forgiveness on the loan, a more realistic timeline given the expected length of this public health and economic crisis.
Fourth, the proposal extends the terms of the loan from 2 years to at least 5 years for any part of the loan that is not forgiven, helping to ensure small businesses and nonprofits are not saddled with quick repayment while recovering from this crisis.
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