The House passed the new bill by an overwhelming margin Thursday. The bill would amend the Small Business Administration’s so-called Paycheck Protection Program, which provides forgivable loans to companies affected by COVID-19. The measure would lower the amount of a loan that must be used for payrolls. The bill would lengthen the time businesses have to use the loans to have them forgiven from eight weeks to 24.
It also would reduce a requirement, set by the administration, that companies use 75 percent of the loan funds on payrolls to 60 percent. Many businesses, mainly shops and restaurants where expenses like rent often far outweigh labor costs, said the rule was too tight. The bill also would lengthen the repayment term for unforgiven loans. PPP loan funds used for purposes other than payroll and fixed costs must be repaid with a 1 percent annual interest. Congress allowed that repayment period to be up to 10 years, but the administration set it at two years. The bill would reset it at five years, which will lower the size of each payment, making the unforgiven debt easier to manage.