President Trump Signs Brindisi-Backed Paycheck Protection Program Flexibility Act To Cut Red Tape & Reduce Restrictions For Small Business Relief Program


June 5, 2020
Press Release

Congressman Works With Democrats And Republicans To Fix PPP Program


Brindisi: It Was An Honor To Work with Democrats and Republicans To Get This Bill To The President’s Desk To Cut Red Tape


President Donald Trump today signed legislation originally co-sponsored by Congressman Anthony Brindisi. The Brindisi-backed Paycheck Protection Program Flexibility Act will make urgently needed changes to the Paycheck Protection Program (PPP). The PPP is a vital initiative for mom and pop small businesses across Upstate New York that are struggling in the wake of the coronavirus pandemic.


Earlier this year, Brindisi helped create the PPP through passage of the CARES Act. He urged the Small Business Administration to work with Congress to reform the program to make sure the funds were reaching small businesses, not multinational corporations. When funding was running low on the PPP and other aid to small businesses, he called on both parties to stop the bickering and partisan games. Because of his advocacy, Congress passed a bipartisan deal to extend the PPP and provide more support to New York businesses. 


“PPP has been a much-needed lifeline for many small businesses across Upstate,” Brindisi said. “But I heard from the people on the ground, fighting to keep their lights on, that it needed changes. So I worked with Democrats and Republicans to cut red tape and reduce the restrictions on the relief. We’ve already lost so much to the pandemic, this law signed by the President will provide much needed relief to our Main Street businesses.”


Brindisi’s efforts to fix the PPP program and champion the concerns of area business owners and non-profits received praise. 


“The PPP Flexibility Act would provide flexibility to nonprofits and small businesses in applying for the PPP loans,” said Jamey Mullen, CEO of the Norwich YMCA and Chairperson, Alliance of New York State YMCAs. “Communities across New York State will continue to rely on the services of the nonprofit sector, like the YMCA, and our 35,000 New York State employees and 12 million not for profit employees, during our recovery efforts from the COVID-19 pandemic. Congressman Brindisi helped lead Democrats and Republicans to pass this bill in the House and now it has been signed by the President. Charitable nonprofits now have the flexibility needed to support their organizations while utilizing the much-needed funding from the Paycheck Protection Program ”


With the President’s signature, the Brindisi supported legislation will:


  • Allow forgiveness for expenses beyond the 8-week covered period.  The current 8-week timeline does not work for many local businesses that are prohibited from opening their doors, or those that will only be allowed to open with restrictions.  Businesses need the flexibility to spread the loan proceeds over the full course of the crisis until demand returns. Otherwise, employees will simply be furloughed at the expiration of the 8 weeks. We want employers to be able to keep their employees on the payroll, not furlough them without pay or terminate them entirely. 
  • Loosen restrictions limiting non-payroll expenses to 25% of loan proceeds.  In order to survive, businesses must pay fixed costs. The PPP loans require that 75% of the loan go to payroll. For many businesses, payroll simply does not represent 75% of their monthly expenses and 25% does not leave enough to cover mortgage, rent, and utilities.  This bill adjusts the rules to a 60% payroll and 40% non-payroll split. Retaining employees is not possible if a business cannot retain their physical location
  • Eliminate restrictions that limit loan terms to 2 years.  According to the American Hotel and Lodging Association, full recovery for that industry following both the September 11, 2001 terrorist attacks and the 2008 recession took more than two full years. This is the same for many other industries. If the past is any indication of the future, it will take many businesses more than two years to achieve sufficient revenue to pay back the loan.
  • Ensure full access to payroll tax deferment for businesses that take PPP loans.  The purpose of PPP and the payroll tax deferment was to provide businesses with capital to weather the crisis.  Receiving both should not be considered double-dipping.  Businesses need access to both sources of cash flow to survive.
  • Extend the rehiring deadline to offset the effect of enhanced Unemployment Insurance.  To receive loan forgiveness under PPP, a business must rehire employees by a deadline of June 30, 2020.  However, the enhanced Unemployment Insurance created through the CARES Act is higher than the median wage in 44 states.  Many businesses have reported an inability to rehire employees because they are making more on Unemployment than they made working.  To mitigate this unintended consequence, the deadline to rehire employees under PPP should be extended to align with the expiration of enhanced Unemployment Insurance.