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Kuster Helps to Pass Bipartisan Legislation to Improve Paycheck Protection Program

Today, Representative Annie Kuster (NH-02) voted in favor of the Paycheck Protection Program Flexibility Act, which passed the House with overwhelming bipartisan support. Kuster is a co-sponsor of this legislation which provides flexibility to the Paycheck Protection Program (PPP) to make critical funds more accessible to small businesses that are facing economic challenges due to the COVID-19 pandemic.

Currently, PPP loans are converted to grants as long as the recipient uses the loan within eight weeks of the CARES Act becoming law (by June 30th). In addition, businesses are required to use at least 75 percent of the loan towards maintaining payroll and the rest for other expenses like rent, mortgage interest, and utilities. 

“I’ve heard from many small businesses in New Hampshire – particularly restaurants and hospitality establishments – that are unable to access forgivable Paycheck Protection Program loans because of the program’s current restrictions,” said Kuster. “This legislation addresses the urgent needs of Granite State small businesses by making the PPP loan program more flexible and available for vulnerable businesses that face economic challenges due to the health and economic crisis caused by COVID-19. I’m pleased to join my colleagues on both sides of the aisle in support of this commonsense measure, and I urge Senate Leadership to bring it swiftly to a vote.”

The Paycheck Protection Program Flexibility Act does the following:

  • Allows loan forgiveness for expenses beyond the 8-week covered period to 24 weeks and extends the rehiring deadline. The current 8-week timeline does not work for local businesses that could only very recently have customers and those that are only allowed to open with very heavy restrictions. Small businesses need the flexibility to spread the loan proceeds over the full course of this crisis, until demand returns. 
  • Increases the current limitation on the use of loan proceeds for non payroll expenses from 25 percent to 40 percent. The current regulation requiring that loan recipients spend no more than 25 percent of loan proceeds on non-payroll expenses (rent, mortgage interest, utilities, etc.) has prevented many small businesses from applying to the program because their rent is significantly more than 25 percent of their monthly expenses. 
  • Extending the program from June 30 to December 31. Requiring the PPP program to operate for 24 weeks will enable more small businesses to take advantage of this program
  • Extending loan terms from two years to five years. Full recovery for the hotel and lodging industry - as well as other industries - following the 9/11 terrorist attacks and the 2008 recession took more than two full years. Therefore, it will likely take many businesses more than two years to recover from the COVID-19 pandemic and pay back the loan
  • Ensuring full access to payroll tax deferment for businesses that take PPP loans. The purpose of PPP and the payroll tax deferment was to provide businesses with liquidity to get through the COVID-19 crisis. Receiving both should not be considered double-dipping. This legislation allows businesses to access both sources of cash flow in order to survive. 

Kuster has been an outspoken advocate for improving the Paycheck Protection Program. This month, Rep. Kuster joined the rest of the NH delegation in sending a letter to Secretary Steven Mnuchin calling on the Treasury to adjust the PPP so that it can more effectively serve the needs of Granite State small businesses. Kuster also sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell last month urging them to increase funding for the PPP.