Paycheck Protection Program Fixes Approved by U.S. Senate

Bill with modifications on loan forgiveness and improve protections for small-business borrowers now awaits approval from President Donald Trump.

6/4/2020 10:30 AM

AdvocacyNewsCOVID-19
Paycheck Protection Program Fixes Approved by U.S. Senate

Reforms to the Paycheck Protection Program established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) were passed in the U.S. Senate by a voice vote June 3.

The Paycheck Protection Program Flexibility Act of 2020, sponsored by U.S. Rep. Dean Phillips, D-Minn., passed in the U.S. House of Representatives May 28 by a 417-1 vote.

This bill modifies provisions related to the forgiveness of loans made to small businesses under the Paycheck Protection Program (PPP) implemented in response to COVID-19, according to congress.gov.

The Paycheck Protection Program had its ups and downs since it was introduced to help businesses keep employees on the payroll, including quickly running out of funding and issues with application delays, according to media reports and an update from Forbes: “Congress Agrees On Favorable Changes To Paycheck Protection Loans: What Does It Mean For Borrowers?”

ACA International members participating in the June 3 Washington Insights livestream focused on advocacy and updates on legislative and regulatory measures impacting the accounts receivable management (ARM) industry, which includes many small businesses, discussed the PPP and loan forgiveness and asked lawmakers questions about the program during the event.

ACA continues to advocate for ARM industry consideration in legislation such as the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES) Act passed in the U.S. House of Representatives May 15 and ongoing packages proposed as part of the CARES Act.

The new bill addresses loan forgiveness issues including:

  • Establishing a minimum maturity of five years for a paycheck protection loan with a remaining balance after forgiveness. The bill also extends the covered period during which a loan recipient may use such funds for certain expenses while remaining eligible for forgiveness. The bill raises the non-payroll portion of a forgivable covered loan amount from the current 25% up to 40%.
  • Extending the period in which an employer may rehire or eliminate a reduction in employment, salary, or wages that would otherwise reduce the forgivable amount of a paycheck protection loan. However, the forgivable amount must be determined without regard to a reduction in the number of employees if the recipient is unable to rehire former employees and is unable to hire similarly qualified employees, or unable to return to the same level of business activity due to compliance with federal requirements or guidance related to COVID-19.

According to congress.gov, the bill revises the deferral period for paycheck protection loans, allowing recipients to defer payments until they receive compensation for forgiven amounts. Recipients who do not apply for forgiveness shall have 10 months from the program's expiration to begin making payments.

The bill also eliminates a provision that makes a paycheck protection loan recipient who has such indebtedness forgiven ineligible to defer payroll tax payments.

Several other legislative proposals regarding business operations are circulating on Capitol Hill, according to ACA’s updated advocacy book issued in May.

  • H.R. 6981 To extend the covered period for loan forgiveness and the rehiring period under the CARES Act, and for other purposes.
  • S. 3833 A bill to extend the loan forgiveness period for the paycheck protection program, and for other purposes.
  • S. 3814 A bill to establish a loan program for businesses affected by COVID-19 and to extend the loan forgiveness period for paycheck protection program loans made to the hardest hit businesses, and for other purposes.
  • S. 3805 A bill to amend the Small Business Act and the CARES Act to modify certain provisions related to the forgiveness of loans under the paycheck protection program, to allow recipients of loan forgiveness under the paycheck protection program to defer payroll taxes, and for other purposes.
  • S. 3793 A bill to amend the CARES Act to modify the employee retention tax credit to secure the paychecks and benefits of workers, to provide a refundable credit against payroll taxes for the operating costs of employers, to amend the Internal Revenue Code of 1986 to provide a small business rebate, and for other purposes.
  • S. 3789 A bill to make a clarifying amendment to the CARES Act.
  • H.R. 6920 To temporarily suspend payroll taxes during the emergency relating to COVID-19.
  • H.R. 6893 To amend the CARES Act and the Small Business Act to make certain adjustments to the paycheck protection program, and for other purposes.

ACA’s past Daily Huddles in April focused on guidance on the SBA Loan Programs.

Members may listen here:

Working with the Small Business Administration

Exploring New Guidance on the SBA Loan Programs


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

Paycheck Protection Program Fixes Approved by U.S. Senate

Reforms to the Paycheck Protection Program established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) were passed in the U.S. Senate by a voice vote June 3.

The Paycheck Protection Program Flexibility Act of 2020, sponsored by U.S. Rep. Dean Phillips, D-Minn., passed in the U.S. House of Representatives May 28 by a 417-1 vote.

This bill modifies provisions related to the forgiveness of loans made to small businesses under the Paycheck Protection Program (PPP) implemented in response to COVID-19, according to congress.gov.

The Paycheck Protection Program had its ups and downs since it was introduced to help businesses keep employees on the payroll, including quickly running out of funding and issues with application delays, according to media reports and an update from Forbes: “Congress Agrees On Favorable Changes To Paycheck Protection Loans: What Does It Mean For Borrowers?”

ACA International members participating in the June 3 Washington Insights livestream focused on advocacy and updates on legislative and regulatory measures impacting the accounts receivable management (ARM) industry, which includes many small businesses, discussed the PPP and loan forgiveness and asked lawmakers questions about the program during the event.

ACA continues to advocate for ARM industry consideration in legislation such as the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES) Act passed in the U.S. House of Representatives May 15 and ongoing packages proposed as part of the CARES Act.

The new bill addresses loan forgiveness issues including:

  • Establishing a minimum maturity of five years for a paycheck protection loan with a remaining balance after forgiveness. The bill also extends the covered period during which a loan recipient may use such funds for certain expenses while remaining eligible for forgiveness. The bill raises the non-payroll portion of a forgivable covered loan amount from the current 25% up to 40%.
  • Extending the period in which an employer may rehire or eliminate a reduction in employment, salary, or wages that would otherwise reduce the forgivable amount of a paycheck protection loan. However, the forgivable amount must be determined without regard to a reduction in the number of employees if the recipient is unable to rehire former employees and is unable to hire similarly qualified employees, or unable to return to the same level of business activity due to compliance with federal requirements or guidance related to COVID-19.

According to congress.gov, the bill revises the deferral period for paycheck protection loans, allowing recipients to defer payments until they receive compensation for forgiven amounts. Recipients who do not apply for forgiveness shall have 10 months from the program's expiration to begin making payments.

The bill also eliminates a provision that makes a paycheck protection loan recipient who has such indebtedness forgiven ineligible to defer payroll tax payments.

Several other legislative proposals regarding business operations are circulating on Capitol Hill, according to ACA’s updated advocacy book issued in May.

  • H.R. 6981 To extend the covered period for loan forgiveness and the rehiring period under the CARES Act, and for other purposes.
  • S. 3833 A bill to extend the loan forgiveness period for the paycheck protection program, and for other purposes.
  • S. 3814 A bill to establish a loan program for businesses affected by COVID-19 and to extend the loan forgiveness period for paycheck protection program loans made to the hardest hit businesses, and for other purposes.
  • S. 3805 A bill to amend the Small Business Act and the CARES Act to modify certain provisions related to the forgiveness of loans under the paycheck protection program, to allow recipients of loan forgiveness under the paycheck protection program to defer payroll taxes, and for other purposes.
  • S. 3793 A bill to amend the CARES Act to modify the employee retention tax credit to secure the paychecks and benefits of workers, to provide a refundable credit against payroll taxes for the operating costs of employers, to amend the Internal Revenue Code of 1986 to provide a small business rebate, and for other purposes.
  • S. 3789 A bill to make a clarifying amendment to the CARES Act.
  • H.R. 6920 To temporarily suspend payroll taxes during the emergency relating to COVID-19.
  • H.R. 6893 To amend the CARES Act and the Small Business Act to make certain adjustments to the paycheck protection program, and for other purposes.

ACA’s past Daily Huddles in April focused on guidance on the SBA Loan Programs.

Members may listen here:

Working with the Small Business Administration

Exploring New Guidance on the SBA Loan Programs


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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