As a result of our advocacy along with other business groups across the nation, we're pleased to report that a bill to amend the Paycheck Protection Program (PPP) has been released by the House
Last night, The Alliance co-hosted a forum with Senator Chuck Schumer where he laid out these reforms which Congress has now introduced.
"Thank you, Leader Schumer, Speaker Pelosi and all members of the New York delegation for strongly advocating for New York City's hospitality industry and supporting critical fixes to the PPP stimulus program that will help tens of thousands of restaurants and nightlife establishments survive and comeback from this pandemic." - Andrew Rigie, executive director of the NYC Hospitality Alliance
Below is a summary of the bill in consideration. 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;
- 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