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house Bill H.R. 7010

Should Small Businesses Receiving Forgivable ‘Paycheck Protection Program’ Loans Have More Flexibility?

Argument in favor

The Paycheck Protection Program has helped many small businesses across the country weather the COVID-19 pandemic. The adjustments this bipartisan bill would make to the program would give small businesses even more flexibility to rehire & use loans to cover overhead costs while still receiving loan forgiveness.

Jacob's Opinion
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05/28/2020
Let’s help the truly “small” businesses. As in, the smaller the business, the higher the priority to approve. The larger the small business, the further down the priority list.
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Leslie's Opinion
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05/28/2020
Thank you Jamie Raskin for voting for flexibility that small businesses may face as they rise to the challenge of operating under a new normal as long as the money is spent on worker salaries & medical care (no bonuses, Cadillac insurance plans, etc) and current utilities. Only business improvements that should be allowed are those to protect employees & customers from Covid-19 spread. Flexibility like loans should only apply to small businesses not publicly traded companies that have other sources of 0% capital, businesses not located in the US, churches that are not business and don’t pay taxes, private schools, etc!
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Roger's Opinion
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05/28/2020
Considering this administration is eliminating the watchdogs and inspector generals along with giving massive contracts worth millions to Trump donors while small business owners get shut down due to lack of funds shows the corruption in America is at an all time high with the GOP exploiting the stimulus packages for their own benefits instead of helping the people who need it the most in this country such as our small business owners. The large corporations already are in decent shape, we should bail out the working class and small mom and pop shops not the large companies who already have millions and billions in their disposal.
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Argument opposed

This bill may be bipartisan, but these modifications to the Paycheck Protection Program will mean that more small businesses receive loan forgiveness and that amounts not forgiven will be repaid over a longer period of time, which means it will ultimately cost the government more taxpayer money.

Michael's Opinion
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05/28/2020
This is catering to a misunderstanding of the original intention of the bill. It's called the paycheck protection program because it was intended to keep employees on the payroll whether the company was open or not. Many businesses complained they weren't open, so they can't pay their employees, but that misses the point. European countries simply paid 80% of the payroll costs for all companies. That would have cost something like $600B/month here, significant, but less than what we are spending, and more effective because it keeps everyone employed and puts money in the pockets of workers who spend it on businesses, keeping them open. Germany's unemployment increased less than a percent, while ours is out of control. The solution here is to expand PPP retroactively so businesses can continue to keep employees on payroll and off unemployment until things are back to normal. We got PPP, but our industry (events) will be slow to recover so we are hoping for an extension or for EIDL to come through, but that's being handled by SBA which isn’t staffed to hand out loans directly.
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B.R.'s Opinion
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05/28/2020
I would not approve this bill as written. While there should be a provision to extend the repayment period, justified by duration of lock-down, more information is needed on percentage of loan allocated to personnel and other costs. As it relates to this, it appears the flexibility in this bill presents opportunity to change the objective of this program.
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Joseph's Opinion
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05/28/2020
Open the country back up, abolish all business crushing regulations (all regulations are), no need for bail outs
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What is House Bill H.R. 7010?

This bill — the Paycheck Protection Program Flexibility Act of 2020 — would provide small businesses that receive forgivable loans under the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) with additional flexibility in terms of permitted uses, and extend both the forgiveness period & the maturity period of loan amounts that aren’t forgiven.

This bill would revise the requirement that small businesses spend at least 75% of PPP loan amounts on payroll and that no more than 25% on covered overhead expenses (including rent, mortgages, and utilities) to instead require that at least 60% of loan amounts be spent on payroll.

The PPP loan forgiveness period would be extended from 8 weeks after origination to 24 weeks after origination or December 31, 2020 — whichever is earlier — although recipients that want to use the 8 week period can do so. This bill would also give small businesses the same timeframe (the earlier of 24 weeks after origination or December 31, 2020) to rehire workers that are unable to do so in the near term, which is currently set at June 30, 2020.

The maturity period for amounts of newly originated PPP loans that aren’t forgiven would be extended from 2 years to 5 years, giving small businesses more time to amortize those amounts at the loan’s 1% interest rate. This provision wouldn't apply retroactively to previously originated PPP loans.

Additionally, this bill would prohibit the mutual exclusivity of PPP loans & payroll tax deferments, thus allowing small businesses receiving PPP loans to receive both forms of aid.

Impact

Small businesses receiving PPP loans; employees of those small businesses who are rehired; and the SBA.

Cost of House Bill H.R. 7010

A CBO cost estimate is unavailable.

More Information

In-DepthRep. Dean Phillips (D-MN) introduced this bill to increase flexibility in the Paycheck Protection Program for small businesses that receive its forgivable loans:

“Representation begins with listening, and I am hearing from too many Minnesota small business owners who have received PPP loans but are afraid to use the money because of the inflexible, one size fits all rules - and others who are not applying for aid at all out of fear and confusion. It won’t matter how much money we appropriate if the distribution mechanisms are broken. Congress now has an opportunity to fix what’s broken and make this important relief program more accessible and useable to the small businesses that need it the most.”

Original cosponsor Rep. Chip Roy (R-TX) added:

“The Paycheck Protection Program (PPP) is providing essential capital to millions of small businesses across the country. Unfortunately for many of these business owners, particularly local restaurants, hotels, and those in the hospitality industry, the terms are too inflexible to provide the help they need to weather the economic storm. PPP cannot protect jobs if workers have no job to return to after state and local lockdowns are lifted. After listening to business owners, I will be introducing this Paycheck Protection Program Flexibility Act to provide essential flexibility to PPP loans. Time is of the essence. Many businesses are already four weeks into the loan and need this flexibility immediately before the forgiveness timeline runs out. I look forward to continue working with my colleagues on both sides of the aisle to enact these simple but critical reforms in order to save small businesses.”

The Problem Solvers Caucus endorsed this bill, with Co-Chair Rep. Josh Gottheimer (D-NJ) calling it “critical to making important fixes and providing new, essential flexibility to the PPP program that will help small businesses in my district.” Fellow Co-Chair Rep. Tom Reed (R-NY) added that, “As we continue to ensure the health and safety of Americans during this pandemic, it’s critical that we also continue to protect our small businesses and provide them with the support they need to get through these challenging times.”

This legislation has the support of 35 bipartisan cosponsors in the House, including 18 Democrats and 17 Republicans.


Of NoteThe Paycheck Protection Program was created with the enactment of the “phase 3” CARES Act, which provided $350 billion in funding for forgivable small business loans under the PPP. Due to high demand, the initial tranche of funding was exhausted after 13 days of operation on April 16th, which aided 1.661 million small businesses and saw an average loan size of $206,000 according to SBA data tabulated by USAFacts.

Senate Republicans attempted to increase funding for the PPP a week before the initial tranche of funding was exhausted, but Democrats blocked that legislation. On April 20th, the Senate reached a compromise on a “phase 3.5” relief bill, the Paycheck Protection Program & Health Care Enhancement Act, which provided $321 billion in additional PPP funding along with funding for other SBA small business aid programs, healthcare provider reimbursement amid the coronavirus pandemic, and coronavirus testing & tracing capacity.

As of Friday, May 22, the SBA had processed 4.4 million loans, totaling about $512 billion in awards of the total $671 billion in funding allocated.


Media:

Summary by Eric Revell

(Photo Credit: iStock.com / valentinrussanov)

AKA

Paycheck Protection Program Flexibility Act of 2020

Official Title

To amend the Small Business Act and the CARES Act to modify certain provisions related to the forgiveness of loans under the paycheck protection program, to allow recipients of loan forgiveness under the paycheck protection program to defer payroll taxes, and for other purposes.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house Passed May 28th, 2020
    Roll Call Vote 417 Yea / 1 Nay
    IntroducedMay 26th, 2020

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    Let’s help the truly “small” businesses. As in, the smaller the business, the higher the priority to approve. The larger the small business, the further down the priority list.
    Like (48)
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    This is catering to a misunderstanding of the original intention of the bill. It's called the paycheck protection program because it was intended to keep employees on the payroll whether the company was open or not. Many businesses complained they weren't open, so they can't pay their employees, but that misses the point. European countries simply paid 80% of the payroll costs for all companies. That would have cost something like $600B/month here, significant, but less than what we are spending, and more effective because it keeps everyone employed and puts money in the pockets of workers who spend it on businesses, keeping them open. Germany's unemployment increased less than a percent, while ours is out of control. The solution here is to expand PPP retroactively so businesses can continue to keep employees on payroll and off unemployment until things are back to normal. We got PPP, but our industry (events) will be slow to recover so we are hoping for an extension or for EIDL to come through, but that's being handled by SBA which isn’t staffed to hand out loans directly.
    Like (10)
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    I am a little concerned about this because the first round of small business PPP funding went to well capitalized and even public traded companies and not to the truly small businesses that was the purported purpose of the PPP program. As I recall, most of them began petitioning for changes in the program. They should not have got the funding by being the biggest, most powerful and quickest hogs to the trough. So, there should be no relief for well capitalized large institutions able to borrow on there own, publicly traded companies, company owned franchises or chains. Frankly, all of those loans should be returned or the companies/institutions that received them publicly shamed for taking them, taking advantage of a crisis funded program not intended for them. As far as the true small businesses, which are not well capitalized, do not have preferential relations with large leaders and who may have trouble getting their former employees back or hiring properly qualified employees - this relief is sorely needed.
    Like (91)
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    When you have an incompetent moron for a president who compares a pandemic to a flu you’re never going to overcome the lack of leadership. Not until you remove Trump will you begin to get back to normal. Children in cages, emboldening white supremacists, gutting the ACA, Donnie Death has stained America.
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    Thank you Jamie Raskin for voting for flexibility that small businesses may face as they rise to the challenge of operating under a new normal as long as the money is spent on worker salaries & medical care (no bonuses, Cadillac insurance plans, etc) and current utilities. Only business improvements that should be allowed are those to protect employees & customers from Covid-19 spread. Flexibility like loans should only apply to small businesses not publicly traded companies that have other sources of 0% capital, businesses not located in the US, churches that are not business and don’t pay taxes, private schools, etc!
    Like (28)
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    I want to say yes, but I want to know that this will extend to ONLY small businesses! If a company is publicly traded on the stock market, it’s NOT small! Again, this isn’t hard!!!!
    Like (19)
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    Considering this administration is eliminating the watchdogs and inspector generals along with giving massive contracts worth millions to Trump donors while small business owners get shut down due to lack of funds shows the corruption in America is at an all time high with the GOP exploiting the stimulus packages for their own benefits instead of helping the people who need it the most in this country such as our small business owners. The large corporations already are in decent shape, we should bail out the working class and small mom and pop shops not the large companies who already have millions and billions in their disposal.
    Like (18)
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    Small businesses are the life and livelihood of our communities. They frequently are maintaining themselves of a shoestring budget. Most of the money allocated to them was "stolen" by big businesses and Trump and his stooges. The best way to re-invigorate our economy is to forgive this debt and student loan debt. Make big businesses and corporations pay their loans back because they got a $Trillion tax break at our expense.
    Like (17)
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    If I thought it would actually go to small businesses. But I don’t feel any confidence about that.
    Like (17)
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    The Paycheck Protection Program has helped many small businesses during the COVID-19 pandemic. This bill is bipartisan and would make adjustments to the program & would give small businesses even more flexibility to rehire & use loans to cover their costs in order to keep their employees in and the doors open while still receiving loan forgiveness.
    Like (15)
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    It’s unconscionable that large corporations get huge amount of money with no strings attached and little mom and pop shops have to jump through hoops to receive money to keep their businesses alive. Corporate culture in this country is completely backwards
    Like (12)
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    Small businesses are the lifeblood of our communities. We must support them, and their employees, as best we can.
    Like (11)
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    As a recipient who hired back all of my employees I would absolutely appreciate this.
    Like (11)
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    Yes! Just because trump says reopen doesn't mean consumers have to rush out or have workers rush in to their homes. trump thinks that reopening will take the financial burden off the feds and he can go back to skimming it all off for himself and his buddies.
    Like (11)
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    The loans should be for true small businesses, not franchises in small states. Repayment needs to be flexible because it’s taken so long to disburse these monies that some small businesses may not survive.
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    My two sons purchased a small chain of dry cleaners less than A year ago and are benefitting from this program and are grateful. They are good operators and well educated. They applied for other opportunities from the government but haven’t Received anything further in assistance. They are grateful and are carrying on with their staff and will weather this storm.
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    This appears to be perfectly reasonable step to help ensure that more of our economy and economic resources survive this pandemic. I see not reasonable argument against this action.
    Like (9)
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    Small businesses need the same protections and benefits offered to corporations.
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    As long as we make sure this goes to true small businesses that need it.
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    Absolutely!! Enough said.
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