I've recently written about everything wrong with the Payroll Protection Plan. Since then, restaurateurs, chefs, small business owners and advocates like Andrew Rigie of the NYC Hospitality Alliance, along with Democrats including Leader Schumer and Speaker Pelosi, have been advocating for amendments to PPP aimed at writing the wrongs of the previous bill.
Last night, Senator Schumer outlined the amendments on a call hosted by Rigie as well as other hospitality leaders such as Tom Colicchio and David Rosen. The call was great, and also gave quite a hilarious glimpse into Senator Schumer's daily life—he admitted that the hardest part of his nearly 24 hour work day is the one hour a day he is charged with watching his 16 month old grandson. Apparently he didn't watch him all that well the other day and he got into the good china and broke some. It's okay, grandpa, we forgive you.
Today, a bill to amend the Paycheck Protection Program (PPP) was released by the House which includes the following amendments to PPP. You may view the bill text here starting on page 821.
Extension of the program from June 30 to December 31 with Dec. 31st as the new deadline for rehiring for forgiveness purposes.
Improves loan terms from current 2 years to new 5 year floor to amortize loans over a longer period of time, which lowers monthly payments
Clarifies that PPP loans cannot be calculated on a compound basis, saving borrowers money over the long-term;
Modifications to PPP Funds, including: A carve out of 25% of the existing funds on the date of enactment to be used specifically for small businesses with 10 or fewer employees to guarantee they are fully able to access PPP assistance; and Establishes an additional set aside of existing funds of the lesser of 25% or $10 billion specifically for community financial institutions, such as Community Development Financial Institutions (CDFIs), Minority Development Institutions (MDIs), SBA microlenders, and SBA Certified Development Companies (CDCs); and Extends the covered loan period from 8 weeks to 24 weeks
Creates a safe harbor for borrowers who cannot rehire due to the inability to rehire in the prescribed timeframe;
Eliminates the 75/25 rule on use of loan proceeds for non-payroll expenses
Thank you Senator Schumer and Speaker Pelosi!