The U.S. House of Representatives voted by a nearly unanimous favor (417-1) on Thursday to pass updates to the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), according to CNN.
What changes were made: The legislation would give small businesses more time to use emergency loans by extending the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks. The bill would also give small businesses more flexibility by changing the “75/25 rule,” which requires recipients to use three-quarters of the money for payroll costs and 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. Lastly, the updated legislation would also allow businesses that receive loan forgiveness under the program to defer payroll taxes.
The fixes to the PPP are reported to be just a stopgap while Congress continues to determine what a new round of sweeping aid would look like.
The Senate would need to pass the legislation to implement the changes and then it would need to be signed into law by President Donald Trump. Last week, CNN reports, the Senate attempted to pass its own legislation to update the PPP but it failed. In the Senate version, the eight-week period would be extended only to 16 weeks and the “75/25 rule” would remain in effect.