Negotiations will continue this week to extend the period within which a Paycheck Protection Program must be used and to give businesses more flexibility in how they spend the money.
The Senate and House of Representatives are each considering their own versions of the bill. The Senate bill, S. 3833, was introduced by Sen. Marco Rubio (R-FL) and would extend the period during which a PPP loan must be spent from eight weeks to 16 weeks. Senate leaders last week has attempted to quickly pass the extension by garnering unanimous consent but failed to do so, delaying action until after Memorial Day.
The House bill, H.R. 6886, would go further than the Senate version. In addition to extending the spending period from eight weeks to 24, H.R. 6886 would abolish the Small Business Administration’s requirement that at least 75 perceent of PPP loan monies be used for payroll expenses; ensure full access to payroll tax deferment for businesses that take PPP loans; and allow businesses to receive full loan forgiveness if they were unable to rehire employees by the June 30 deadline as long as they made a good faith effort to rehire employees.
House Speaker Nancy Pelosi has agreed to allow a vote on H.R. 6886 this week. The bill will be considered on the House suspension calendar, meaning it will need a two-thirds majority to pass.
The National Association of Wholesaler-Distributors, of which FEDA is a member, is working to support passage of the House bill.
It appears that congressional action will be necessary for changes to the PPP to occur. Treasury Secretary Steven Mnuchin told The Hill in an interview that extending the eight-week loan period was not something he could do administratively. Additionally, he indicated that he would not alter the program so that businesses could use more of the loan to cover overhead costs. “It’s called the Paycheck Protection Program, it’s not called the overhead protection program,” he said.