June 4, 2020—On Wednesday night, the U.S. Senate passed the House version of Paycheck Protection Program legislation, thus lengthening the time for loan recipients to spend the funds and still qualify for forgiveness of the loans, as noted in a report by the Journal of Accountancy.
The Senate passed by voice vote the House-passed Paycheck Protection Program reform bill, clearing the way for President Donald Trump's signature. The bill, which passed the House last week, offers business owners more time and flexibility to use loan money while still getting it forgiven as part of the PPP.
"We can't wait any longer. Businesses are really suffering for lack of these changes," Senate Minority Leader Chuck Schumer said on Wednesday, per a CNN report. "We must get this done. Businesses are going under every day."
The legislation would give small businesses more time to use emergency loans under the program by extending the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks.
The bill figures to give small business increased flexibility by altering the "75/25 rule," which requires recipients of funds under the program to use three-quarters of the money for payroll costs to limit other costs to no more than 25 percent in order to be eligible for loan forgiveness. The new ratio would be at least 60 percent on payroll, and no more than 40 percent on other costs.