President Donald Trump signed legislation Friday morning to make it easier for businesses or churches struggling during the coronavirus pandemic to take advantage of a payroll subsidy program that's been a critical part of Washington's response to the economic crisis.
The legislation gives business owners more flexibility to use taxpayer subsidies for other costs and extend the lifespan of the Payroll Protection Program as the economy slowly begins to recover.
It passed the House last week on a 417-1 vote and was approved by the Senate on Wednesday.
It increases the loan forgiveness period from eight to 24 weeks, reduces the payroll requirement from 75% to 60%, raises the loan repayment period from two to five years and extends the June 30th rehiring deadline.
The remaining 40% can be used for mortgage payments, rents and utilities. It also adds some limited flexibility on the number of employees that must be maintained. And, after the forgiveness is applied, if there is still a loan to be repaid, the minimum maturity for the loan is now five years.
It’s good news for the many Kentucky Baptist churches who applied for the loan, said Kentucky Baptist Convention Church Financial Benefits Consultant Don Spencer.
“I’ve talked to a number of church leaders with questions that focus on whether they will be able to meet the requirements to have the loan forgiven,” Spencer said. “This amendment will dramatically increase their ability to meet those requirements and therefore, what began as a loan, will become a grant.”
With the extension from eight weeks to 24 weeks for the qualified use of the funds, it will likely enable most of the churches using the loan to qualify the full amount of the loan for forgiveness, Spencer said.
Congress has approved $660 billion for the program in two installments.
“I applaud the Senate for passing this legislation that will provide additional flexibility to the historic Paycheck Protection Program, allowing it to continue to protect Kentucky workers and small businesses through the coronavirus pandemic,” said Senate Majority Leader Mitch McConnell. “I continue to hear from Kentucky workers and small businesses who are benefitting from the program.”
The Paycheck Protection Program has delivered more than half a trillion dollars in relief and has literally saved tens of millions of American jobs, and with passage of this new legislation we will be able to continue to assist working families and Kentucky small businesses, McConnell said.
“We very much appreciate Senator McConnell for providing us the opportunity for more time to use the PPP loan,” said Theresa White, Financial Coordinator for Cumberland Valley Domestic Violence Services, London, Kentucky. “Domestic violence does not stop because of the pandemic. We’ve been open 24/7, with necessary rearrangements and precautions. The PPP loan will ensure that we have adequate funds to pay staff and keep our doors open for all victims of domestic violence.”