By Anjuli B. Woods | Enterprise Counsel Group
The bill, authored by House Representative Dean Phillips (D-Minn.) and Chip Roy (R-Texas), passed with a 417-1 vote and is now awaiting a Senate vote.
The legislation seeks to relax several of the cumbersome restrictions on small businesses’ use of PPP funds. Specifically, the bill would relax the requirement for small businesses to use 75% of PPP loan proceeds on payroll, leaving only 25% of funds to spend on other operating expenses such as rent and utilities. The 75/25 formula would be replaced with a 60/40 formula.
The bill would also extend the eight-week “covered period” small businesses must spend the money (to qualify for full forgiveness), to the earlier of twenty-four weeks from loan origination or December 31, 2020. This will provide much needed relief to those small business still unable to re-open.
“The Paycheck Protection Program (PPP) Flexibility Act, if passed by the Senate and signed into law, will provide significant flexibility to many small businesses struggling to cope with existing restrictive rules.” ~Dan Gauthier, Attorney at Rose Law Group