Small Business Majority Hails Critical PPP Fixes in New House Stimulus Legislation
Washington, DC – Today, Small Business Majority founder and CEO, John Arensmeyer, issued the following statement on the Payroll Protection Program (PPP) fixes included in House Democrats’ latest stimulus proposal, the HEROES Act, which could receive a vote as early as this Friday.
“As most states begin to reopen, we continue to hear from small business owners that any financial assistance they have received from PPP will not sustain their recovery. For many entrepreneurs, the stimulus programs have brought more questions than answers. As it stands, PPP is totally unworkable for small businesses due to the eight week spending period and a lack of guidance on loan forgiveness. For over a month now, small businesses have been left in the dark as they attempt to make critical business decisions, and in some instances, this confusion has dissuaded those in need from even applying for relief.
While we were hopeful that lawmakers would use this opportunity to establish a robust grants program for small businesses, which our network of 65,000 small businesses tells us they desperately need, we are pleased that the legislation includes a number of critical fixes to PPP. Among these changes are the elimination of the threshold that businesses must spend 75% of a loan on payroll and an extension of the spending period from eight weeks to 24, which will help ensure businesses have the flexibility to reopen and rehire at a responsible pace. Additionally, we are glad that the legislation places special emphasis on ensuring the smallest businesses and those owned by women and people of color are receiving an equal share of stimulus funding.
If PPP is to serve as the small business lifeline it was intended to be, lawmakers in both chambers must act swiftly to pass these fixes into law before time runs out on the program. Each day that passes without action is another day that business owners are faced with determining if they will ever reopen.”
Key HEROES Act provisions to improve PPP:
- Extends allowed spending period through December 31, 2020, and lengthens the spending period from 8 weeks to 24 weeks after the date of loan origination, which is critical for businesses that received PPP funds but aren’t able to put their employees back to work at this time.
- Establishes a set aside of not less than 25% of program funding for loans made to recipients with 10 employees or less.
- Requires that any PPP loans returned to the U.S. Treasury must be obligated to businesses with 10 employees or less.
- Ensures that PPP loan forgiveness will be determined without regard to a reduction in full-time employees if the business:
- Is not able to rehire an employee,
- Is able to prove that they tried to rehire staff at regular levels.
- As a result, the nonpayroll portion of a forgivable loan may not be limited.
- Provides funding for resources and services in languages other than English.
- Places restrictions on collecting small business and nonprofit debt during a national disaster or emergency.
For members of the media that wish to speak with small business owners about their experiences with PPP or John Arensmeyer, please contact Aimee Brierly at [email protected].
About Small Business Majority
Small Business Majority was founded and is run by small business owners to ensure America’s entrepreneurs are a key part of a thriving and inclusive economy. We actively engage our network of more than 65,000 small business owners in support of public policy solutions and deliver information and resources to entrepreneurs that promote small business growth. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.