Paycheck Protection Program Flexibility Act of 2020

Floor Speech

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Mr. NADLER. Mr. Speaker, I rise today in support of this legislation to provide a critical source of aid to small businesses and nonprofits during the COVID-19 pandemic. While the Paycheck Protection Program was established as an eight-week program, it was clear from the start that the economic impact of the pandemic would last far longer. I am proud that the House addressed this issue by expanding the covered period to 24 weeks in the Heroes Act earlier this month, and I am glad this bill also includes a 24-week extension. The extended timeline will give borrowers the flexibility to spread out the loan proceeds over the full course of the crisis, and in a manner that is best for their small business or nonprofit.

The legislation also takes action to change the harmful ``75/25'' percent rule that the Small Business Administration established to limit the use of Paycheck Protection Program loan proceeds for nonpayroll expenses to 25 percent. While increasing the current limitation on the use of loan proceeds for nonpayroll expenses from 25 percent to 40 percent will allow many small businesses to apply for the program, I am disappointed that this legislation falls short of the Heroes Act and fails to eliminate the rule. Congress intended for the Paycheck Protection Program to be a critical resource for all small businesses impacted by the pandemic. We must make sure that the program will be there and workable for microbusinesses in high rent areas like New York City. Microbusinesses--such as ``mom and pop'' shops and corner stores--are the lifeblood of our communities. I will continue working to ensure that the small business assistance programs created in the CARES Act are accessible and viable for the most vulnerable small businesses.

I am also disappointed that this legislation was amended to remove language to retroactively establish a five-year minimum maturity on Paycheck Protection Program loans for amounts not forgiven. While the CARES Act allowed a maximum maturity of up to ten years from when the borrower applied for the loan, the Small Business Administration limited the minimum maturity of the loans to two years just hours before financial institutions began accepting Paycheck Protection Program loans. To address this issue, the Heroes Act established a minimum maturity on PPP loans of five years to enable borrowers to amortize loans over a longer period of time, decreasing their monthly payments on any portion that is not forgiven. While this legislation also establishes a five-year minimum maturity on Paycheck Protection Program loans, it fails to make the change retroactive for the millions that have already received their loans. I will continue to call for the minimum maturity on Paycheck Protection Program loans to be extended for all Paycheck Protection Program borrowers.

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