May 29, 2020

Dear John,

I want to pass along an important update from Washington regarding some fixes to the Paycheck Protection Program (PPP). Yesterday, I voted to pass the PPP Flexibility Act, a bipartisan bill that will expand benefits and eligibility within the Payroll Protection Program.

Congress created the PPP as a lifeline to small businesses owners who closed their businesses to protect others from the spread of COVID-19. However, some of the guidelines for the program have prevented the loans from getting in the hands of the folks who need it most. Based on feedback from North Texas small business owners, I helped to make some legislative adjustments to the PPP.

The PPP Flexibility Act makes the program more accessible and usable for the vulnerable small businesses that need it the most.

The bill improves the program by:

• Allowing loan forgiveness for expenses beyond the 8-week covered period to 24 weeks and extending the rehiring deadline.
• Increasing the current limitation on the use of loan proceeds for nonpayroll expenses from 25 percent to 40 percent. Currently, under regulations issued by the Administration, the PPP loans require that no more than 25 percent of loan proceeds can be spent on non-payroll expenses such as rent, mortgage interest, and utilities.  This limitation has prevented many small businesses, such as independent restaurants, from applying to the program because their rent is significantly more than 25 percent of their monthly expenses.
• Extending the program from June 30 to December 31.
• Extending loan terms from two years to five years.
• Ensuring full access to payroll tax deferment for businesses that take PPP loans. The purpose of PPP and the payroll tax deferment was to provide businesses with liquidity to weather the crisis. Receiving both should not be considered double-dipping. Businesses need access to both sources of cash flow to survive.

Small businesses are the backbone of our North Texas economy and I will continue to fight for them in Congress. If you have questions on the PPP or other COVID-19 assistance for small businesses, please visit my website or give my Richardson office a call: (972) 972-7949. 

Sincerely,

Colin Allred
Member of Congress