The Senate unanimously passed the bill on Wednesday evening to give business owners more flexibility and time to use loan money, and still get it forgiven as part of the Paycheck Protection Program, which provides direct relief to small businesses amid the coronavirus pandemic.
Senate Majority Leader Mitch McConnell, R-Ky., asked for a unanimous consent vote Wednesday evening and received no objection hours after Sen. Ron Johnson, R-Wisc., objected to its passage because he wanted assurances of changes to be made at a later time to the program.
What does this mean?
- The ‘Paycheck Protection Flexibility Act,’ gives businesses more time to use their loan money to 24 weeks from eight weeks.
- 60-40: The bill expands how much of the funds would have to be spent on payroll costs. Initially, the share of funding that could be directed toward payroll costs was 75 percent. Now, 40 percent of the loan can be directed toward non-payroll costs.
- The bill eliminates restrictions limiting non-payroll expenses to 25 percent of the loan.
- The bill extends the deadline to rehire employees to align with the expiration of enhanced Unemployment Insurance, which was created through the CARES Act, and in some cases is higher than the median wage in 44 states.
Sources: CNBC.com, Bloomberg.com, nbcnews.com, washingtonpost.com