Walorski Votes to Improve Paycheck Protection Program for Small Businesses
House Passes Bipartisan Legislation to Give Small Businesses More Flexibility with Forgivable PPP Loans
WASHINGTON – U.S. Rep. Jackie Walorski (R-Ind.) today voted for bipartisan legislation to give small businesses and non-profits more time and flexibility to use Paycheck Protection Program (PPP) forgivable loans to pay expenses and make payroll during the coronavirus crisis.
“The Paycheck Protection Program has been a critical lifeline to help small businesses and non-profits keep the lights on and save jobs during this public health and economic emergency,” Congresswoman Walorski said. “Now we have an opportunity to make PPP even more effective in ensuring Main Street can recover and rebuild in the coming weeks and months. By giving small businesses more time and flexibility to use these forgivable loans, we can ensure PPP is working in the way that’s best for our local job creators and workers.”
Since Congress created PPP under the CARES Act, nearly 75,000 small businesses and non-profits in Indiana have received PPP loans totaling more than $9.3 billion.
Congresswoman Walorski is an original cosponsor of the Paycheck Protection Program Flexibility Act (H.R. 7010), which passed the House by a vote of 417 to 1.
H.R. 7010 would:
- Extend the forgiveness period to 24 weeks.
- Extending the covered period from eight weeks to 24 weeks accommodates businesses in many stages of reopening.
- Small businesses that prefer to stay within the original eight-week window can opt out of the extension.
- Replace the 75/25 rule with a 60/40 rule.
- Currently 75 percent of the loan must be used on payroll costs, and 25 percent can be used on mortgage interest, rent, and utilities. Failure to adhere to this rule impacts loan forgiveness.
- Adjusting this rule gives small businesses more control over how they use their loan funds.
- Give all new PPP loans a five-year maturity.
- As small businesses continue to recover from the economic impact of COVID-19, extending the loan maturity gives them more time to rebuild their business.
- Existing loans will remain at a two-year maturity.
- Ensure small businesses won’t be penalized by high unemployment insurance benefits.
- To receive loan forgiveness, a business must rehire employees by December 31, 2020.
- Unfortunately, higher unemployment benefits have discouraged some employees from returning to work.
- Businesses that make a good faith effort to rehire will satisfy headcount requirements for the purpose of forgiveness.
- Create a safe harbor for businesses that are required to open at only 50 percent capacity.
- Allow businesses that receive forgiveness to also receive payroll tax deferment.
Walorski represents the 2nd Congressional District of Indiana, serving as a member of the House Ways and Means Committee.