WASHINGTON – Thousands of restaurants, nail salons and other small businesses unable to take full advantage of the financial lifeline provided by the federal paycheck protection program would benefit from the flexibility needed under a bipartisan bill the House passed overwhelmingly on Thursday.

The bill, now headed to the Senate, relaxes some key rules regarding loan repayments and spending restrictions on the PPP. The program, created in March as part of the CARES Act, has already provided more than 4.4 million small businesses with a cash injection to keep their workers on the payroll during the Coronavirus pandemic that devastated the American economy and disrupted everyday life.

The $ 660 billion program, enacted as part of Congress’ response to the coronavirus crisis, offers companies employing up to 500 workers forgivable loans of up to $ 10 million. But many companies have said the program’s structure is too rigid to accommodate different types of small businesses, especially restaurants whose high rent spending doesn’t fit well into a program that prioritizes rehiring employees.

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The new changes would be:

• Lower to 60% from 75% the minimum share of the PPP loan which must be devoted to the payroll. The rest must be spent on rent, utilities, and other business-related expenses.
• Extend the length of the loan period from eight to 24 weeks.
• Extend the repayment period for new PPP loans from two to five years if the amount granted does not turn into a grant.

New York Democratic Representative Nydia Velázquez, who chairs the House Small Business Committee, said changes are needed to deal with an evolving pandemic that has led to widespread adoption of social distancing measures that continue to maintain many businesses closed or well below capacity.

“Small businesses always have a tough road ahead and they need flexibility in how they use this emergency capital,” she told the House before the House voted 417-1 to pass. the legislation.

The National Federation of Independent Businesses approved the bill, saying it would clear up some of the confusion around the program’s rules and give family businesses more time and flexibility to open.

“Local and state government shutdown orders exceeded expectations when the CARES Act was enacted on March 27, 2020, making it difficult to reopen small businesses and rehire employees,” wrote Kevin Kuhlman, vice president of relations Federal government officials from the NFIB in a statement. letter to lawmakers urging them to support the measure.

Republicans who control the Senate could get hold of the bill as early as next week. They have been open to some of the changes to P3s.

Florida GOP Senator Marco Rubio, who chairs the Senate Small Business Committee, has said he expects most of the changes proposed by the House to be acceptable to the Senate. A possible disagreement could emerge over the House’s provision extending the loan amount to 24 weeks, senators discussed a short period, such as 16 weeks.

The House passed the measure on day two that allowed many members to vote by proxy, a historic change that allows one member to designate another as their “proxy” and vote on their behalf.

While the goal was to allow lawmakers to have a voice if they couldn’t get to Washington safely due to the coronavirus pandemic, House Republicans argued the rule violated the Constitution and filed a complaint Tuesday night challenging it.

Republicans argue that any measure passed in this format, especially one where proxies have the deciding vote, could be legally challenged, a point House Minority Leader Kevin McCarthy echoed regarding the small business legislation Thursday.

“I think whatever is taken exudes doubt as to whether it’s constitutional or not,” the California Republican said at his weekly press conference. “It’s a legitimate question. It is about the constitutionality of anything they want to advance.

Contribution: Christal Hayes