Small businesses look for reprieve
Deal nears on summer extension for $6.6B payroll protection funding
As a June deadline looms for thousands of Connecticut small businesses to decide whether to push ahead with full payrolls after taking incentives to do so, U.S. Congress was nearing an extension on Friday that would push back that deadline by months to buy time for companies to make those decisions.
More than 55,500 Connecticut businesses borrowed money under the
Paycheck Protection Program to avoid laying off workers amid the coronavirus crisis, representing a $6.6 billion infusion for the state. That is more than triple the amounts paid out by the Connecticut Department of Labor for unemployment compensation between March and May.
Both PPP and expanded unemployment were part of the $2 trillion Coronavirus Aid, Relief and Economic Security Act. Congress originally covered eight weeks of funding for companies to borrow to cover payrolls and other costs, with the bill forgiving those loans if they do not lay off workers.
With Gov. Ned Lamont having initiated on May 20 a limited resumption of business activities like retail and restaurant service, revenues for many are still well short of what they require to support their normal staffing levels.
The U.S. House of Representatives passed nearly unanimously on Thursday a
Paycheck Protection Flexibility bill that extends that original eight-week window to 24 weeks. That represents a major reprieve for businesses that borrowed in the first echelon of the program in mid-April, which were coming up against mid-June deadlines to decide on their staffing moving forward.
The House bill was sponsored by U.S. Rep. Dean Phillips, D-Minn., and Rep. Chip Roy, R-Texas, with Rep. Joe Courtney, D-Conn., and
Jahana Hayes, D-Conn., among 85 co-sponsors. The legislation now moves to the U.S. Senate for final consideration before heading to the White House.
“The ... CARES Act was negotiated to get help out the door fast, and now that PPP loans have been law for several months it’s clear where we need to improve,” Courtney said in a Thursday press release from his office. “Employers need more flexibility so that PPP loans can be the widely applicable funding source they were intended to be — not (a) ... potentially costly loan for small employers.”
In addition to the extended deadline, the House bill would reduce the amount of funding that businesses must devote to payrolls to 60 percent of loan funds received from the prior threshold of 75 percent.