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May xx 2020
Please Support H.R. 6886, the Paycheck Protection Flexibility Act
I am a small business in ___________ and sell recreational vehicles, which includes motorhomes and travel trailers. My dealership before February 15th employed ___ employees, with a payroll of $______ per year/month.
I was successful and grateful to receive a loan under the Small Business Administration’s Paycheck Protection Program (PPP) authorized under the U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act was quickly drafted in 2 weeks and the PPP promised a business owner loan forgiveness if the business retains or rehires all the workers they had in late February. Despite the best intentions of the PPP at the time, the continued state stay-at-home orders and the inflexible PPP loan terms have made the PPP loans too inflexible to truly assist our business in this long shut-down and to fulfill the PPP loan’s intended purpose.
According to House Speaker Nancy Pelosi, the House will vote next week on a bipartisan proposal to make the popular small-business Paycheck Protection Program more flexible and extend the time limit for using the aid. The Paycheck Protection Flexibility Act, H.R.6886, introduced by Minnesota Democrat Dean Phillips and Texas Republican Chip Roy earlier this month, would allow businesses receiving forgivable loans to be able to use the funds on payrolls for more than the eight weeks under the original program and relax a requirement that 75% of the loans be used for payroll expenses. It would also give them more than two years to pay back the loans and allow businesses that receive PPP loans to receive a payroll tax deferment.
Our RV Dealership would benefit from the following provisions in H.R. 6886:
- Allow forgiveness for expenses beyond the 8-week covered period. The 8-week timeline does not work for 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 could simply be furloughed at the expiration of the 8 weeks.
- Eliminate restrictions limiting non-payroll expenses to 25% of loan proceeds. Currently, the PPP loans require that 75% of the loan go to payroll, but 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.
- Eliminate restrictions that limit loan terms to 2 years. Full recovery for many industries could take more than two full years and it will take many businesses more than two years to achieve sufficient revenue to pay back the loan, if they are not granted full loan forgiveness.
- 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, and the deadline to rehire employees under PPP should be extended to align with the expiration of enhanced Unemployment Insurance.
Currently, our dealership is more than __ weeks past our loan distribution date, but my state is still under orders from residents to stay-at-home and my dealership is under restrictions about being open to the public. I do not see the point at this time to rehire all my workers, pay them to do little or nothing, and then potentially lay them off again if business remains weak two months from now. My dealership will not be able to use the PPP funds to bring all my laid-off workers back, even though that is exactly what the program is designed to do.
Please consider supporting this bipartisan and rational legislation
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