FEDA has joined hundreds of other business groups from across the country in signing onto a letter asking congressional leaders, the U.S. Department of the Treasury, and the U.S. Small Business Administration (SBA) to repeal the Paycheck Protection Program’s (PPP) requirement that 75 percent of funds be used for payroll for businesses to qualify for loan forgiveness, among other changes.
The letter was drafted by the U.S. Chamber of Commerce on behalf of small businesses. In addition to requesting the elimination of the 75-25 percent rule, the group requests the extension of the eight-week period for purposes of calculating loan forgiveness and extending the June 30 safe harbor date for rehiring employees and restoration of pay.
“These steps would conform the PPP with the reality of the gradual reopening now occurring across the United States and would help ensure that more small businesses remain in operation,” the letter says.
The letter adds that these three changes would help ensure that the liquidity provided through the PPP will be used in a way that is most likely to help small businesses remain open by allowing companies to use more of the funds for rent payments, vendor contracts, and other necessary expenses.
To read the full letter, please click here .
During a Senate hearing Tuesday, May 19, Secretary of the Treasury Steven Mnuchin defended the imposition of the payroll ratio. Still, there appears to be growing bipartisan support for changes to the PPP, according to the National Association of Wholesaler-Distributors. A story from The Hill details some of the potential fixes being debated by lawmakers.