The Senate Wednesday night passed legislation that would give 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 last week, and the Senate passed it without objection. The legislation now goes to President Donald Trump's desk.
The bill is timely because the current eight-week deadline is approaching for the first businesses that received Paycheck Protection Program loans.
The 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 available to businesses with 500 employees or fewer. The Small Business Administration allowed community-owned rural hospitals to begin receiving the loans in April.
"Your legislation provides needed flexibility to allow this program to work for hospitals and their communities," American Hospital Association Executive Vice President Tom Nickels wrote a May 26 letter supporting the bill, which was initially introduced by Reps. Chip Roy (R-Texas) and Dean Phillips (D-Minn.). However, Nickels said AHA still wants changes that would allow hospitals to qualify regardless of bankruptcy status and waive affiliation rules for not-for-profit entities, which would allow more hospitals to qualify.
