WASHINGTON – President Donald Trump on Friday signed into law a new version of the small-business loan program known as PPP that had been redesigned by Minnesota Democratic Rep. Dean Phillips and a Texas Republican colleague.
The new law, called the Paycheck Protection Program Flexibility Act, reshaped the forgivable loans Congress created in late March as the coronavirus pandemic forced many businesses to shut down and lay off workers.
It now lets businesses qualify for loan forgiveness up to $10 million if they meet certain criteria. And it extended the period in which business can spend funds in order to have them forgiven.
Businesses forced to shut down during the pandemic now have more leeway to pay rent, mortgages and other operating expenses with proceeds from the loans. Previously, a sizable portion of the loans were directed toward worker pay.
The law also suspends payroll taxes for small businesses.
Phillips has said the legislation arose from complaints he heard from struggling small-business owners in Minnesota who needed help but didn’t qualify for forgivable loans under the original rules of the program.
Trump signed the bill on the day that new unemployment data showed that the original construction of the program likely contributed to driving people back to work.
Since the original loans had to be used right away, and the funds started to arrive to small businesses in late April and early May, they helped create a net gain of 2.5 million jobs in May, the Labor Department reported.
Even so, the modification to the program proved wildly popular. Phillips crafted it with a conservative Republican House colleague, Chip Roy of Texas. The pair drummed up support from 55 trade groups, as well as small businesses.
The bill passed the House with just one dissenting vote and passed the Senate unanimously.