The House passed bipartisan legislation Thursday to give small businesses more flexibility with the loans they received during the coronavirus pandemic to keep their businesses afloat.
The Paycheck Protection Program (PPP) Flexibility Act, authored by Rep. Dean Phillips, D-Minn., and Chip Roy, R-Texas, passed with a 417-1 vote and now heads to the Senate.
"Millions of small business owners in this country are one step closer to meaningful relief," Phillips tweeted after the near-unanimous vote. "This is what's possible when leaders listen, act and collaborate.
During the pandemic, Congress allocated $659 billion to small businesses in PPP loans that could be converted to grants if they met certain requirements. The new legislation loosens some of the restrictions on the loans that businesses found too burdensome given that many are still closed or operating at reduced capacity due to prolonged stay-home orders. The legislation extends the time to use the money from eight weeks to 24 weeks. The bill eliminates the cumbersome 75/25 restrictions that forced businesses to spend 75 percent of their loans on payroll and only 25 percent on other operating expenses like rent and utilities. The formula changes to 60/40 percent. For loans that aren't forgiven, businesses would have more time for repayment, from two years to five years.
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