WASHINGTON -- The House passed by an overwhelming margin Thursday a bill to cut small businesses more slack in how they use coronavirus lifeline loans.
The bill would amend the Small Business Administration's so-called Paycheck Protection Program, which provides forgivable loans to companies affected by COVID-19 that need not be repaid if the money is used for payroll and some fixed costs, like rent. The measure would lower the amount of a loan that must be used for payrolls and give borrowers more time to use them.
Members filed into the chamber one by one, all sporting masks and some also wearing gloves, to vote 417-1 for the measure co-sponsored by Reps. Dean Phillips, D-Minn., and Chip Roy, R-Texas. The usual chatty din of congressional hobnobbing and cajoling was replaced by the occasional Democrat delivering proxy votes on behalf of colleagues staying at home.
The bill would lengthen the time small businesses have to use the loans in order to have them forgiven from eight weeks to 24, reflecting the longer-than-expected length of the coronavirus countermeasures.
It also would reduce a requirement, set by the administration, that companies use 75% of the loan funds on payrolls to 60 percent. Many businesses, particularly shops and restaurants where expenses like rent often far outweigh labor costs, said the rule was too tight.
The bill originally scrapped the payroll limitation entirely, but Phillips said that upset other stakeholders.
"Labor was concerned that it would reduce the amount of money that would go to employees," he said. "We also wanted to pass something that wouldn't just pass this chamber but also the Senate and find, perhaps, a signature in the White House."
The bill also would lengthen the repayment term for unforgiven loans. PPP loan funds used for purposes other than payroll and fixed costs must be repaid with a 1% annual interest. Congress allowed that repayment period to be up to 10 years, but the administration set it at two years. The bill would reset it at five years, which will lower the size of each payment, making the unforgiven debt easier to manage.
FiscalNote, parent company of CQ Roll Call, has received a loan under the Paycheck Protection Program.
Phillips said he was cautiously optimistic that the Senate would pass his bill when it returns next week.