On May 28, the House of Representatives overwhelmingly passed HR 7010, legislation that would reduce certain restrictions for borrowers of the small business PPP loan program enacted as part of the CARES Act in March. Among other things, this legislation, introduced by Reps. Dean Phillips (D-MN) and Chip Roy (R-TX), would extend the time for borrowers to spend PPP loans from eight to 24 weeks and still qualify for loan forgiveness.
It also would reduce from 75% to 60% the minimum amount of loan proceeds that must be spent on payroll costs, allowing more money to be used for other fixed costs such as rents. In addition, the bill would allow businesses five years (up from two) to repay their PPP loans and would allow borrowers to delay payment of employer payroll taxes. The Senate is expected to begin consideration of the legislation next week.
(Contact: Dara Bernstein at dbernstein@nareit.com)