U.S. SENATE – Today, President Trump signed Senator Daines’ bipartisan bill giving greater flexibility under the Paycheck Protection Program (PPP) to support and provide more relief for Montana’s small businesses and workers impacted by the coronavirus pandemic.
“The Paycheck Protection Program has already been very effective in Montana, and now with President Trump signing my bipartisan bill increasing flexibility for small business owners and workers under the program, it’ll be even better,” Daines said. “Under the PPP program, Montana small businesses will now have greater access to relief they need to stay open, support our workers and protect jobs. I’m also thankful for our great Montana bankers who have been working around the clock to get relief to our Montana small businesses.”
Daines bipartisan bill:
- Extends the 8-week “covered period” for forgiveness to 24 weeks.
- This is critical for small businesses that applied for their PPP loan and received it before they were able to open their doors. This helps small businesses help workers stay employed, otherwise employees may be furloughed or without a job at the end of the eight weeks. Businesses that received a loan before passage of this bill can keep their 8-week period.
- Require at least 60% of forgiven loan amounts to come from payroll expenses (down from 75%)
- Many borrowers were at risk of not being able to meet this requirement, and considered returning their loans and shutting their doors. This will provide flexibility to employers.
- Moves rehiring safe harbor from June 30th to December 31st
- Currently, under PPP, a small business has to hire their employees back by June 30th. Due to enhanced unemployment insurance under the CARES Act, some small businesses are having trouble rehiring workers. Without greater flexibility, some small businesses may be forced to close their doors if they are unable to rehire workers. Therefore, increasing flexibility helps keep the doors open and give workers a place to go back to work. It also helps give Montanans on unemployment insurance more incentives to get back to work.
- Allows Full 2020 Payroll Tax Deferral
- The CARES Act did not allow PPP borrowers to defer payroll taxes after the date their loan was forgiven. This changes that requirement to allow employers who take PPP loans to still defer employer-side payroll taxes through 2020.
- Establish a minimum loan maturity period of five years, instead of the current two-year loan term.
- This requirement will provide borrowers more flexibility in paying back non-forgiven amounts. This only applies for loans issued after the bill is signed into law, but borrowers and lenders could mutually agree to extend current loans.
Daines introduced his bipartisan bill with Senator Angus King (Maine). Reps. Dean Phillips (Minn.) and Chip Roy (Texas) introduced it in the House.