A week after being passed by the U.S. House of Representatives, the Paycheck Protection Program Flexibility Act has been passed by the Senate, CNN reports. The next step is for the bill to be signed by President Donald Trump. After initial pushback by Sen. Ron Johnson of Wisconsin, the bill passed via unanimous consent.
The legislation would give small businesses more time to use emergency loans, extending the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks. It also gives small businesses more flexibility by changing the “75/25 rule,” which requires recipients of funds under the program to use 75 percent of the money for payroll costs and to limit other costs to no more than 25 percent in order to be eligible for loan forgiveness; under the update, at least 60 percent would have to be allocated on payroll and no more than 40 percent on other costs. Businesses that receive loan forgiveness under the program would be able to defer payroll taxes.
The American Society of Travel Advisors (ASTA) released a statement approving of the passage of the bill. “We commend the Senate for passing the Paycheck Protection Program Flexibility Act (H.R. 7010), which would change PPP loan terms—in some cases retroactively—in a number of ways ASTA has advocated for, including five-year loan terms, reducing the requirement that 75 percent of the loan must go to payroll to get forgiveness, allowing forgivable expense over 24 weeks (as opposed to the current eight) and allowing companies to restore headcount without jeopardizing forgiveness by the end of the year (versus the current June 30),” said Eben Peck, EVP Advocacy. “While the PPP will remain complex, this bill gives more flexibility to PPP recipients and increases the chances that loans can be fully forgiven.”
The fixes to the PPP are intended to be a stopgap while Congress continues to determine a possible new round of sweeping aid.
This article originally appeared on www.travelagentcentral.com.