House passes bill to extend PPP loan deadlines

(Photo: Diego M. Radzinschi / ALM)

House lawmakers passed the 2020 Paycheck Protection Program Flexibility Act on Wednesday afternoon, HR 7010, which extends several deadlines for small businesses that have received PPP loans.

HR 7010 performs the following operations:

  • Allows the remission of expenses beyond the period covered from 8 weeks to 24 weeks and extends the rehiring period;
  • Increases the current limit on non-salary expenses (such as rent, utility payments, and mortgage interest) for loan cancellation from 25% to 40%;
  • Extends the program from June 30 to December 31;
  • Extends loan terms from two to five years; and
  • Ensures full access to payroll tax deferral for companies taking out PPP loans.

Rep. Dean Phillips, D-Minn., Who sponsored the legislation with Rep. Chip Roy, R-Texas, tweeted Thursday that “with a vote of 471-1, the PPP Flexibility Act is a clear winner. and the Senate should pass without delay. Good policy and good representation starts with listening – that’s what small businesses tell us they need to survive.

As for extending the deadline to apply for a PPP loan to December 31 from June 30, Leon LaBrecque, chief growth officer at Sequoia Financial Group in Troy, Michigan, told ThinkAdvisor on Thursday that while the extension is nice , “But again, what about those companies that needed it, used it and followed the old rules?”

LaBrecque said the bill would also require that at least 60% of the amounts of canceled loans come from salary expenses, which is an “acceptable change.”

Another “acceptable” change: the bill also repeals a provision in the CARES law that prohibited companies benefiting from a forgiveness of PPP loans from deferring the payment of their payroll taxes.

Borrowers could also “defer principal and interest payments on PPP loans until the SBA compensates lenders for any amount canceled, instead of the current six-month deferral period,” LaBrecque explained. “Borrowers who do not ask for forgiveness would be given at least 10 months after the program expires to start making payments. “

“This bill dramatically increases the ability of small businesses to achieve full forgiveness of their PPP loan and will change forgiveness compliance,” said Erik Asgeirsson, CEO and Chairman of CPA.com, in a report. “The current lack of flexibility in some PPP provisions has created unnecessary challenges. We welcome the attention of Congress to this important issue, as it will allow more businesses to apply for and use P3 relief.

Source link

About Kelly Choos

Kelly Choos

Check Also

GA Telesis announces agreement to acquire fleet of 777-300ER aircraft

FORT LAUDERDALE, Fla .– (COMMERCIAL THREAD) –GA Telesis has signed an agreement to acquire a …