Congress is Considering Major Improvements to the PPP Loan Program

Wednesday, September 15, 2020.


The pandemic stimulus debate in Washington continues to focus on a possible continuation of the unemployment supplement (previously $600 per week), another $1,2000 per person direct payment, and other stimulus provisions.  There has been no official action on an extension to PPP and the parties continue to say they are "far apart" on many provisons of the stimulus package in general.  However, PPP continues to be mentioned as an important relief program for small businesses.  

As it stands at this moment, the authority for SBA to approve a PPP loan guarantee ended on August 8.  

Senators Rubio and Collins introduced the Continuing Small Business Recovery and Paycheck Protection Act (S. 4321) that is the leading candidate to be a part of the additional coronavirus relief, if PPP is included. The provisions in the bill are consistent with the summary at the bottom of the page. 

The bill expands and makes the existing PPP more flexible.  Plus, it creates two new programs:  a second draw PPP and a 30 year 1% interest (for borrowers) loan program.

For more detailed information on S.4321, click on these links:

If PPP is included in an additional relief bill, the Senate and House will now negotiate over this bill and the others.  (The current House bill, H.R. 6800, passed on May 15.) The major issues in the bill do not involve PPP, but relate to the level of unemployment payments and aid to schools and local governments.  There is a major push to reach a compromise and pass a relief bill before the election, which could include these PPP provisions:

  • Deadline for PPP application approval by SBA extended from August 8 until the end of 2020.
  • Forgiveness for borrowers under $150,000 will be "streamlined" (a single form and no documents delivered) and under $1 million will have and "intermediate forgiveness process." 
  • Loan forgiveness will be expanded to include certain supplier costs, operating and other expenses.
  • Second "draw"of PPP loans for businesses under 300 workers or within the SBA size threshold for their industry that can demonstrate 50 percent lost revenue compared with a reference period. These loans will be calculated similarly to the last round, but will have a smaller cap.
  •  There is also a new working capital loan offered for businesses under 300 workers that is an alternative to a second round of PPP (Cannot double dip with the "second draw").
  • There will be a more generous PPP calculation for farmers and ranchers based on their 2019 gross income.