From the office of Congressman Anthony Brindisi:
Following Feedback From Local Small Businesses & Amid Growing Economic Stress Due To Global Pandemic, Brindisi Fights To Improve Paycheck Protection Program
Brindisi: I Heard From Countless Small Businesses That The Restrictions on PPP Were Too Much; This Bipartisan Legislation Fixes Those Problems & Helps Our Mom And Pop Shops
Congressman Anthony Brindisi joined House Democrats and Republicans to pass the Paycheck Protection Program Flexibility Act. The measure, sponsored by Brindisi, will make urgently needed changes to the Paycheck Protection Program (PPP). The PPP is a vital initiative for small businesses struggling in the wake of the coronavirus epidemic used by mom and pop businesses across Upstate New York.
“Our small businesses are the backbone of our economy, but unfortunately due to the pandemic, many are struggling,” Brindisi said. “During COVID-19, we are all fighting this pandemic together and our mom and pop shops have sacrificed so much. It is critical that we give them the support and flexibility they need to keep their lights on. I heard from countless businesses that the red tape and restrictions on PPP were too much, so I worked with Democrats and Republicans to pass this bill and fix those problems.”
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.
The Paycheck Protection Program Flexibility Act passed with broad, bipartisan support and will eliminate regulations and red tape for small businesses across Upstate New York. Brindisi’s efforts to improve the PPP for local small businesses was praised by area restaurateurs and business groups.
“The Cortland County Chamber of Commerce is fully supportive of the PPP Flexibility Act,” said Cortland County Chamber of Commerce President Bob Haight. “As you know we have hundreds of local businesses greatly impacted by Covid-19 and while the PPP has been a help to many it hasn’t gone far enough. The Paycheck Protection Program Flexibility Act will further assist those businesses still struggling during our pandemic until they can achieve enough revenue through their traditional sales to sustain themselves and their employees.”
“We’re very grateful to Congressman Brindisi for his leadership with the Paycheck Protection Program Flexibility Act,” said Stacey Duncan, Executive Director of Broome County IDA. “Passage of this legislation is vitally important to our small businesses that have taken a huge hit from COVID 19, especially businesses in our service industry. His support of this bill demonstrates that he has a great understanding of the needs of business as we begin to recover.”
“New York’s 22nd District has 1200 franchise businesses like mine,” said owner of the Vestal Planet Fitness Dave Humphrey. “This bill can help us all as we navigate PPP loans and work to safely reopen locations and retain workers. I appreciate Rep. Brindisi’s leadership getting this bill through the House, and hope that it will soon become law.”
“My restaurant has been closed for 12 weeks,” said Dan Krupke, Oswego County Restaurant Owner. “I received my PPP on May 6th and I can not utilize the funds since I am closed. Once we can open, it will take time for customers to get used to the adjustments and feel safe to eat out once again. I anticipate a slow opening. The PPP funds will greatly assist me and will reduce some of my losses that I have incurred while being closed. Rent, utilities are mounting up and is quickly eating up any reserves that I had. By extending the covered period beyond the 8 weeks will permit me to open with some confidence that I may be able to bring back my former staff.”
The bipartisan Paycheck Protection Program Flexibility Act would:
- 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.
The Paycheck Protection Program Flexibility Act is supported by the U.S. Chamber of Commerce, International Franchise Association (IFA), American Hotel and Lodging Association, Independent Restaurant Coalition, NFIB, National Restaurant Association, US Travel Association, Small Business Majority, U.S. Hispanic Chamber of Commerce, National Small Business Association, National Association for the Self-Employed, Small Business and Entrepreneurship Council, Economic Innovation Group, Medical Group Management Association, Small Business Roundtable, National Newspaper Association, National Association of Women Business Owners, National Association of Manufacturers, National Independent Automobile Dealers Association, National Association of Wholesaler-Distributors, National Association of Federally Insured Credit Unions, and the Associated General Contractors of America.
“I was sent to Washington to fight for small businesses and protect our Upstate economy,” Brindisi added. “The pandemic knocked many of our small businesses, working families, and communities down, but together we will come back stronger than ever. This bill gives small businesses the flexibility they need.”