As Congress weighs easing PPP rules, small businesses like what they hear
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The House is set to vote this week on a bill that would ease many of the Paycheck Protection Program’s rules. Businesses would get more time to spend the money and have the loans forgiven. They’d also be allowed more flexibility in how they spend the money. We checked in with some small-business owners to find out what they think.
Currently, if businesses want their PPP loans forgiven, they have to spend the money in eight weeks.
Tiffany Turner, co-founder of Adrift Hospitality, which runs five hotels in Washington state, said there’s a problem with that.
“The recovery’s going to take a lot longer than eight weeks,” Turner said. “In fact, most of us are still going to be in a crisis when that eight weeks is up.”
Turner said she’s worried she’ll have to lay people off after eight weeks, given how hard the pandemic has hit her industry.
The House bill would give businesses 16 additional weeks to spend their PPP money. Turner said that would go a long way toward getting her loan forgiven, something she was counting on when she took it.
“There’s so much uncertainty about the next 12 to 18 months that taking on any additional debt is just bad business at this point,” she said.
The proposal would also do away with the requirement that businesses spend 75% of their PPP loans on payroll. That would free up money for inventory, rent and other loan payments. Vermont restaurant owner Mark Frier said he needs more flexibility, especially if he gets more time to spend the loan.
“As you extend out the time, we’re going to continue to have those fixed costs of rent and utilities,” Frier said.
If a loan isn’t forgiven, the House bill would extend the time businesses have to pay it off from two years to five. Frier said that would bring down his monthly payments, but they’d still be pretty steep.
“Mine would drop from $25,000 to $10,000 a month, but that still represents basically my profitability for years.”
If businesses want their loans fully forgiven, they still have to bring back their employee headcounts.
Matt Hetrick runs the accounting firm Harmony Group. He said the extensions would give businesses more time to figure out how to do that.
“You’ll be able to plan, and if you’re not able to get your full forgiveness, you can plan for that,” Hetrick said. He added that these changes would reduce the confusion that’s surrounded the program from day one.
And they would help companies accomplish the goal of the PPP loans: to keep employees working.
COVID-19 Economy FAQs
What’s going on with extra COVID-19 unemployment benefits?
It’s been weeks since President Donald Trump signed an executive memorandum that was supposed to get the federal government back into the business of topping up unemployment benefits, to $400 a week. Few states, however, are currently paying even part of the benefit that the president promised. And, it looks like, in most states, the maximum additional benefit unemployment recipients will be able to get is $300.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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