The Senate passed the Paycheck Protection Program Flexibility Act after it cleared the House of Representatives on Thursday. The bill allows business owners more time and flexibility regarding the use of federal loan money that still allows for it to be forgiven as part of the Paycheck Protection Program. It now requires President Donald Trump's signature before the reformations become law.
The initial bill came as part of the $2 trillion CARES Act to help struggling small businesses with emergency loans during the pandemic. According to CNN, the new bill extends the eight-week period that business owners were given to use their loans to qualify for forgiveness, tripling the allotted time to 24 weeks. It also gives some leeway by changing the so-called 75/25 rule, which meant that 75 percent of the money be used for payroll costs, with 25 percent for other costs. The new rules allow 60 percent for payroll and 40 percent for additional costs.
Republican Rep. Chip Roy of Texas and Democratic Rep. Dean Phillips of Minnesota first proposed the Paycheck Protection Program Flexibility Act, and it passed with a whopping 471-1, with Rep. Thomas Massie of Kentucky being the sole vote against the measure. Senate Minority Leader Chuck Schumer urged the Senate to pass the bill quickly, stating, "we can't wait any longer and that "businesses are going under every day" as a result of widespread temporary closures put in place back in March to help slow the spread of coronavirus.
Much like the issue-plagued stimulus checks that also came as part of the CARES Act, the Paycheck Protection Program was also fraught with difficulties after its rollout. Just hours after the funds were made available in mid-April, the funds had been depleted before the end of the business day. By the end of April, a new application process was launched, though it crashed within an hour of going live.
There was also the issue of where the money ended up going. Instead of small businesses, the program ended up paying millions to companies ranging from Ruth's Chris Steakhouse to the Los Angeles Lakers. Some, like the Lakers, returned the money, whereas Ruth's Chris did not. Additionally, there were some rumors that other wealthier individuals would receive upwards of $1.7 million, which later proved to be untrue.