Meng Takes Action to Help Queens Workers and Small Businesses
May 29, 2020
Congresswoman votes to pass key fixes to Paycheck Protection Program
WASHINGTON, D.C. – U.S. Rep. Grace Meng (D-NY) announced today that she voted to pass a bipartisan bill aiming to deliver further relief to Queens small businesses impacted by the COVID-19 pandemic.
The Paycheck Protection Program Flexibility Act (H.R. 7010) would increase flexibility and access to the Paycheck Protection Program (PPP), an initiative created by the Coronavirus Aid, Relief and Economic Security (CARES) Act that provides loans to struggling small businesses.
Under the current program, PPP loans convert to a forgivable loan as long as a small business uses it within eight weeks of the enactment of the CARES Act (by June 30), and that at least 75 percent goes towards keeping employees on the payroll with the remaining 25 percent being used for such necessary expenses as rent, mortgage interest, and utilities. However, many small businesses, particularly very small businesses, have reported that with these restrictions, the loans do not meet their needs. So, the House passed the Paycheck Protection Program Flexibility Act to fix this problem.
The measure would improve PPP loans by:
Allowing forgiveness for expenses beyond the eight-week covered period to 24 weeks and extending the rehiring deadline;
Increasing the current limitation on nonpayroll expenses (rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent;
Extending the program from June 30 to December 31;
Extending loan terms from two to five years; and
Ensuring full access to payroll tax deferment for businesses that take PPP loans.
“I have heard from so many small businesses in Queens that the current limit in the PPP program of only 25 percent of loan proceeds being used for nonpayroll expenses such as rent, prevents them from applying for PPP loans,” said Meng. “We know that rent cost is high for our district. We need to make sure this program truly helps those businesses that are in most need. That is why I am glad the Paycheck Protection Program Flexibility Act would increase this flexibility by raising the percentage from 25 percent to 40 percent. This, and several other improvements, are critical fixes to help our small businesses – the lifeblood of our district – recover from the unprecedented economic impact of this pandemic.”
The Paycheck Protection Program Flexibility Act passed the House by a vote of 417-1. The measure now heads to the Senate.