Federal legislation authored by Minnesota Democrat Dean Phillips to help cash-strapped businesses affected by the COVID-19 pandemic is on its way to the desk of President Donald Trump.
The U.S. Senate unanimously approved changes to the Paycheck Protection Program on Wednesday night. The House previously approved the measure on a vote of 417-1.
Phillips' bill aims to provide flexibility to the program by extending repayment deadlines and loosening spending rules for businesses that tap the program's funds.
Phillips and Rep. Chip Roy, a conservative Texas Republican and former aide to U.S. Sen. Ted Cruz, pushed the bill together in response to confusion and anxiety among small-business owners using the program, which makes low interest loans of up to $10 million for businesses and forgives them if companies meet certain spending criteria.
At first, companies needed to spend 75% of their loans to pay workers, with the rest eligible for rent, mortgages or utilities. Businesses needed to spend the entire amount of the loan within eight weeks in order avoid repayment.
The legislation, dubbed the Paycheck Protection Program Flexibility Act, removes the payroll-spending restriction and extends the eight-week window to 24 weeks. Phillips said many small-business owners were not applying for loans because of those limits.
Phillips said many business owners such as restaurateurs need to be able to shift more of the loan money to rents and mortgages given that many have been shut down and furloughing employees in recent months.
The measure is the first stand-alone bill he has pushed through Congress.
