Monday, June 1, 2020

Congressman Bergman Supports PPP Flexibility Act 2020

Policies work wonders but sometimes there may be tweaks that can help make programs more effective. When dealing with policies it is hard to craft a perfect one size fits all. The UP has a lot of tourism and mom & pop type businesses that dont fit into the standard approaches. Some adjustments are necessary.

The following is taken from a press release......

Bergman Supported Paycheck Protection Program Flexibility Act of 2020 Passes House

Washington - Today, the Paycheck Protection Flexibility Act – which Rep. Bergman helped introduce – passed the U.S. House 417 - 1. The Paycheck Protection Program (PPP) is the small business relief program enacted by the CARES Act, implemented by SBA, and facilitated by SBA-approved lenders. Unfortunately, for some First District businesses, the terms of the PPP have proven too inflexible for employers, employees, and lenders weathering the current economic storm.

Following House passage of the bill, Rep. Jack Bergman said, "I'm grateful the PPP Flexibility Act passed the House in overwhelming fashion today. Small businesses across the First District and the entire nation have felt the economic strain due to the coronavirus, but the PPP has come very far in easing this burden. This bill will add much-needed flexibility for the local employers making good-faith efforts to support their employees and communities and will help carry Northern Michigan and the U.P. into the U.S. economic recovery."

“We appreciate Congressman Bergman’s leadership with the PPP Flexibility Act,” stated Marty Fittante, CEO, InvestUP, “It is evident that he has listened to the small business community of the Upper Peninsula to propose changes that better serve and support them which in turn will help to further our region’s economic recovery.”

“I appreciate Representative Bergman’s leadership and dedication to see the Paycheck Protection Program Flexibility Act through the House. The hospitality industry has been decimated in Michigan and the original Paycheck Protection Program, while well intended, has proven largely unworkable for an industry that remains mostly dormant. The flexibility embodied in this legislation will allow more restaurants, hotels and resorts to survive, then thrive in our state’s great northern region,” said Justin Winslow, President and CEO of the Michigan Restaurant and Lodging Association.

The PPP Flexibility Act Will:
  • Allow forgiveness for expenses beyond the original 8-week covered period.
    • This timeline does not reflect reality for many First District businesses that are prohibited from opening their doors or are able to open with restrictions. 
  • Relax restrictions limiting non-payroll expenses to 25% of loan proceeds.
    • For many businesses, especially seasonal businesses - payroll does not represent 75% of their monthly expenses and 25% does not leave enough to cover mortgage, rent, and utilities. The new legislation increases the non-payroll share to 40%.
  • Eliminate restrictions that limit loan terms to 2 years.
    • According to the American Hotel and Lodging Association, full recovery for their industry following both the September 11, 2001 terrorist attacks and the 2008 recession took more than two full years. This bill makes five years the minimum length of a PPP loan.
  • Ensure 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 capital to weather the crisis. Receiving both should not be considered double-dipping. 
  • Provide a rehiring safe harbor for businesses unable to rehire employees due to the effects of enhanced Unemployment Insurance.
    • To receive loan forgiveness under PPP, a business must rehire employees by a deadline of June 30, 2020. Businesses that make a good faith attempt to rehire employees, but are unable to, should still be able to receive loan forgiveness.
Small businesses looking to apply for a PPP loan, click HERE.

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