Nonprofit PPP Flexibility Act celebrates the U.S. House of Representatives bipartisan legislation passed today to give nonprofits more flexibility with the loans they received to keep their charities afloat. The Paycheck Protection Program (PPP) Flexibility Act of 2020 passed with a 417-1 vote and now heads to the Senate (WHERE IT IS EXPECTED TO PASS!)
“Millions of nonprofit organizations in this country are one step closer to meaningful relief,” Rep. Dean Phillips, D-Minn., and Chip Roy, R-Texas tweeted after the near-unanimous vote. “This is what’s possible when leaders listen, act and collaborate.”
The legislation extends the time to use the loan from eight weeks to 24 weeks and gives businesses more time to pay back loans beyond the initial two-year term. The bill eliminates the cumbersome 75/25 restrictions that said nonprofits must spend 75 percent of their loans on payroll and only 25 percent on other operating expenses like rent and utilities. The formula changes to 60/40 percent.
The changes also allow charities to receive payroll tax deferments even if they use the PPP loan program and gives them a break from the requirement that it must rehire its employees by June 30, 2020, in order to receive loan forgiveness.
Here’s your INSIDE CHARITY summary:
“On to the Senate,” Roy tweeted after the vote. “Let’s get this done.” (The only ‘no’ vote in the House on the PPP legislation was Rep. Thomas Massie, R-Ky.)
The House failed to pass another Philips bill on Thursday, the TRUTH Act, that would have required the Small Business Administration to disclose PPP loans made over $2 million. The bill had 269 yeas and 147 nays, but failed to meet the two-thirds majority needed for passage under the suspension of the rules.
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