The House of Representatives on Thursday passed legislation that would allow healthcare providers that received forgivable small business loans more flexibility on how they can spend the money.
The House overwhelmingly passed the Paycheck Protection Program Flexibility Act 417-1. The bill is timely because the current eight-week deadline for borrowers to use funds is approaching for the first businesses who received Paycheck Protection Program loans. There is a similar proposal in the Senate, though it is unclear what shape final legislation could take.
The House bill would give borrowers 24 weeks instead of eight weeks to spend the PPP funds, allow them to delay paying payroll taxes, and would only require them to spend 60% of the loan expenses on payroll costs instead of 75% as stipulated in the CARES Act, Congress’ third and largest COVID-19 response legislation.
PPP loans are only open to businesses with 500 employees or fewer. The Small Business Administration allowed community-owned rural hospitals to begin receiving the loans in April.
The formula the Small Business Administration used to determine PPP loan amounts made it difficult for healthcare providers to meet the 75% payroll requirement, said Hall Render Killian Heath & Lyman attorney James Willey.
“If I had to pick, […]
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