The much needed Payroll Protection Program (PPP) will likely be receiving much needed adjustments after a 417-1 vote in the House to do so yesterday. The legislation is expect to pass through the Senate in similar fashion. The main tweak to the loan program is to allow small businesses 24 weeks instead of 8 weeks to use the PPP loans in a way that allows them to be forgiven.
The PPP loan program was intended to provide small businesses with 500 or fewer employees much needed financial aid during the pandemic. Since the launch of the PPP program, there have been more than 4.4 million loans granted for a total of nearly $511 billion. A huge part of the program’s appeal is that the loans are to be forgiven if certain criteria are met. However, there has been controversy concerning the program. Many small businesses reported challenges with lenders who made the process far more complicated than it was intended to be. Also, there were numerous reports of large companies using a quirk in the law to receive loans not intended for businesses their size.
Legislation will help businesses by providing them more time qualify for “loan forgiveness”. Furthermore, the adjustments proposed will allow businesses to spend 40% of the loan towards non-payroll related costs instead of only 25% as stipulated in the original PPP legislation.
These proposed adjustments to the PPP program will be much needed and well received by small businesses.
