The measure would change documentation requirements for employers who say they’ve been unable to rehire laid-off employees. Under the program, the amount of loan forgiveness is reduced if companies don’t maintain head count and salaries. The bill also clarifies that a borrower doesn’t have to start repaying a loan until the SBA determines whether it can be forgiven.
Also, employers would be required to comply with coronavirus safety standards.
Rubio contends the House language creates a problem for companies that use less than 60% of a loan on payroll. The current PPP program allows partial loan forgiveness if a company uses less than 75% of a loan for payroll, but the House bill appears to state that none of the loan would be forgiven if the 60% threshold isn’t met.
Rubio also says the new certification on inability to rehire employees is too broad and would give businesses less incentive to rehire.
Differences over these matters could lead the Senate to amend the bill and send it back for further House action.
Funding Level
The PPP, the centerpiece of the $2.2 trillion relief package Congress enacted in March, allows loans of as much as $10 million that can be forgiven if a business spends it within eight weeks on payroll and no more than 25% for rent and other approved expenses.
The idea was to help businesses keep workers on the payroll while they were closed during stay-at-home orders, so they could be ready to reopen when the bans lifted. But restaurants and other small businesses have said they need more time to spend the funds because they won’t be ready to reopen or be fully functional at the end of eight weeks.
The second round of $320 billion in PPP funding began April 27 after an initial allocation of $349 billion was exhausted in just 13 days. The SBA reported on its website that more than 4.4 million loans worth $510.5 billion had been approved as of Wednesday night, meaning about $130 billion remains.
This article was provided by Bloomberg News.