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Providing Flexibility for Small Businesses During Pandemic, Balderson Legislation Passes House

Washington, May 28, 2020
  • Small Biz Open

WASHINGTON – Bipartisan legislation co-authored by Congressman Troy Balderson (R-OH) cleared a key hurdle today as it passed the U.S. House of Representatives. The Paycheck Protection Program Flexibility Act would restore certain terms of the Paycheck Protection Program (PPP) to Congress’ original intent under the CARES Act, providing more flexibility for PPP loan spending decisions and to use and repay these loans on an appropriate schedule.

“The Paycheck Protection Program was designed to help Ohio’s small businesses stay afloat during this pandemic, yet in some ways it has harmed these businesses,” said Balderson. “Their comeback, just like our country’s as a whole, cannot happen overnight. Small businesses owners need increased flexibility: to decide how they’ll spend the money from these loans and to use and repay them over longer periods of time.”

The Paycheck Protection Program Flexibility Act (H.R. 7010) would instruct the Small Business Administration (SBA) and Department of the Treasury to make four key changes in administering the PPP to more closely reflect the program’s original intent:

  • Extends the covered use period for loans to the earlier of either 24 weeks or December 31, 2020, rather than the 8-week period mandated by SBA and the Treasury.
  • Extends the repayment deadline from 2 years to a minimum of 5 years and a maximum of 10 years, including a 6-month deferment on payments, with interest.
  • Reduces the percentage of loans required to be used for payroll to qualify for loan forgiveness from 75% to 60%.
  • Ensures small businesses are not penalized under the program's terms if previously-furloughed employees refuse to return to work due to high unemployment benefits.

“Small business owners are working hard to safely and swiftly reopen and rehire,” said Kevin Kuhlman, the National Federation of Independent Business Vice President of Government Relations. “They are doing all that they can to support their employees and ensure that they are in full compliance with the provisions of the Paycheck Protection Program loan terms. The Paycheck Protection Program Flexibility Act of 2020 grants small business owners urgently needed flexibility by extending the loan forgiveness period and reducing the payroll limitation of the program. We thank Congressman Balderson for his work on this legislation, and we urge the Senate to act quickly to consider it.”

“The U.S. Chamber of Commerce supports H.R. 7010 because it improves the SBA PPP lending program to better reflect challenges facing small businesses as they struggle to reopen,” according to Tom Sullivan, U.S. Chamber of Commerce Vice President for Small Business Policy. “Making it easier for small business PPP borrowers to convert their low interest loans into grants will free up capital Main Street needs to emerge from the pandemic.”

This legislation is co-authored by Congressmen Dean Phillips (D-MN), Chip Roy (R-TX), and 80 bipartisan lawmakers. It now moves to the U.S. Senate for consideration.

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