Congressman Gonzalez Applauds New Law to Help Workers and Small Businesses by Supporting Passage of Key Fixes to Paycheck Protection Program

WASHINGTON – Today, Congressman Vicente Gonzalez (TX-15) lauded the passage and signing of a bipartisan bill into law to deliver further relief for small businesses in the 15th District of Texas. H.R. 7010, The Paycheck Protection Program Flexibility Act makes key fixes to the Paycheck Protection Program (PPP) to assist small business owners in South Texas and across the country who are struggling the most as a result of the coronavirus.

"I am proud to have voted in favor of the recently passed bipartisan reforms to the Paycheck Protection Program," said Congressman Gonzalez. "This legislation is intended to address the concerns of small businesses and is based on their input, particularly in the service and hospitality industries. Congress passed and the president signed this bill into law to provide urgently-needed adjustments so that the smallest of businesses have the flexibility to obtain the assistance they urgently need."

Many small businesses in Texas as well as across the country, have reported that the current limit in the PPP program of only 25 percent of loan proceeds being used for nonpayroll expenses such as rent, prevents them for applying for PPP loans. For many small businesses, including for example small independent restaurants, their rent or mortgage interest tend to be significantly more than 25 percent of their total monthly expenses. Hence, to address their concerns, this bill raises that percentage from 25 percent to 40 percent.

The bipartisan PPP Flexibility Act will increase flexibility and access to PPP loans including by:

• Allowing forgiveness for expenses beyond the 8-week covered period to 24 weeks and extending the rehiring deadline;
• Increasing the current limitation on nonpayroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent;
• Extending the program from June 30 to December 31;
• Extending loan terms from two to five years; and
• Ensuring full access to payroll tax deferment for businesses that take PPP loans.

Congressman Gonzalez voted to pass the bipartisan bill in the House. The Senate passed the PPP Flexibility Act on June 3, 2020.