Today, Rep. Annie Kuster (NH-02) released the following statement upon the Paycheck Protection Program Flexibility Act being signed into law.
“Over the past several months, I have spoken with numerous small business owners – particularly in the restaurant and hospitality sector – who have struggled to access loan financing through the Paycheck Protection Program (PPP),” said Rep. Kuster. “I was pleased to cosponsor and support the passage of the bipartisan Paycheck Protection Program Flexibility Act to strengthen the PPP by extending the loan forgiveness period from 8 weeks to 24 weeks and providing greater flexibility for loan expenses. With this bill now becoming law, I urge the Small Business Administration (SBA) to work with community banks and lenders to ensure small businesses can utilize these important services.”
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. In May, 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.