Bill 118 HR 3798, also known as the Small Business Flexibility Act, aims to provide small businesses with more flexibility in how they use funds received through the Paycheck Protection Program (PPP). The PPP was established to provide financial assistance to small businesses struggling during the COVID-19 pandemic.
The Small Business Flexibility Act would extend the covered period for PPP loan forgiveness from 8 weeks to 24 weeks, giving small businesses more time to use the funds in a way that maximizes forgiveness. This extension would allow businesses to use the funds for a longer period of time, potentially helping them to retain employees and keep their businesses afloat.
Additionally, the bill would reduce the requirement for businesses to use 75% of the loan amount for payroll costs in order to qualify for full loan forgiveness. Under the Small Business Flexibility Act, businesses would only need to use 60% of the loan amount for payroll costs, giving them more flexibility to use the remaining funds for other expenses such as rent, utilities, and mortgage interest.
Overall, the Small Business Flexibility Act aims to provide small businesses with the flexibility they need to weather the economic challenges brought on by the COVID-19 pandemic. By extending the covered period for loan forgiveness and reducing the payroll cost requirement, this bill seeks to support small businesses in their efforts to survive and recover from the financial impacts of the pandemic.