The House this week overwhelming voted in favor of a bipartisan bill to give small businesses more time and flexibility to use their Paycheck Protection Program (PPP) loans.
Currently, loan recipients have eight weeks to spend Paycheck Protection Program loans and must use 75% of the proceeds to pay payroll expenses in order to be eligible for loan forgiveness.
The Paycheck Protection Program Flexibility Act extends the period to use the loans to 24 weeks and mandates that borrowers spend only 60% on payroll. It also extends the June 30 rehiring deadline.
The measure, introduced by representatives Dean Phillips (D-Minn.) and Chip Roy (R-Texas), passed in a 417-1 vote.
The U.S. Travel Association called for these changes in April, saying that with so many travel-related business closed, the restrictions were unrealistic, especially given that with hotels, for example, 60% of its costs are fixed.
"Quite frankly, our businesses don't have customers right now," said U.S. Travel executive vice president of public affairs Tori Emerson Barnes at the time. "We don't have revenue coming in. We need the loans to be able to pay the broader costs."
U.S. Travel also called on Congress to extend loan forgiveness through December.
"The current loan program assumes we are up and back in business in June, and it's not looking like that will be the case," Barnes said. "These businesses through no fault of their own don't have customers, and if we want business to survive then they're going to need help."
ASTA, which has also lobbied for
to the PPP, applauded the bill’s passage in the House.
According to Eben Peck, ASTA’s executive vice president of
advocacy, the bill included a number of changes the Society had asked for that
would be favorable to agencies:
• Five-year loan terms.
• Reducing the requirement that 75 percent of the loan must
go to payroll to get forgiveness.
• Enabling forgivable expenses over 24 weeks, instead of the
current eight weeks.
• Enabling companies to restore headcount without
jeopardizing forgiveness by the end of the year, a date that currently stands
at June 30.
Peck said the bill saw “substantive revisions” before it was
passed in the House, and ASTA expects a different version to come out of the
“We expect the legislation to be finalized next week or the
week after and will be pushing for [it] to maximize flexibility and loan
forgiveness for loan recipients,” Peck said.
This story was amended on Monday to add an ASTA statement.