Congress in Talks to Change PPP Forgiveness Rules
As of this morning, congressional leaders are in talks with officials at the U.S. Treasury Department about relaxing Paycheck Protection Program rules.
Currently there are two provisions under the PPP that are cause for concern among small business owners: one requiring loan money be spent within 60 days and the other mandating that 75% of the loan amount be spent keeping employees on the payroll.
The intention of the PPP was to keep workers attached to their company but the timeline lacks flexibility. When the PPP was initially passed, businesses were expected to reopen more quickly than they have and since enacted, the PPP terms have been increasingly tightened.
If relaxed, the 75-25 percentage will have more flexibility and small business owners will have an opportunity to use increased funds to pay for rent and operating expenses beyond just payroll. For these changes to come to fruition, there is a greater likelihood of relaxing PPP restrictions by making administrative rule changes rather than by trying to change the law in Congress. While still in talks, this relaxation has many small business owners hopeful.