Assistant store manager Jesus Alvarez rings up groceries from behind a new plexiglass barrier at Ralphs Kroger grocery store after California issued a stay-at-home order in an effort to prevent the spread of coronavirus disease (COVID-19), in Los Angeles.
Lucy Nicholson | Reuters
The U.S. small business relief program may be changed to allow borrowers to use their loans to buy personal protective equipment for workers and pay for upgrades needed to reopen amid the coronavirus pandemic, according to documents obtained by CNBC.
The proposed bill, a bipartisan effort led by Sen. Marco Rubio, chairman of the Senate’s small business committee, would give small business owners more flexibility in how they use the loans, addressing several persistent complaints about the $660 billion effort.
Shutdowns in parts of the country hardest hit by the coronavirus have gone on for longer than anticipated when the Paycheck Protection Program was created, causing business owners to question how effective the program would be. The PPP is a key component of the government’s response to economic disruptions caused by the pandemic.
The bill extends the window in which borrowers can deploy the funds to 16 weeks from the eight currently allowed and pushes the deadline to apply for the program to Dec. 31 from the current June 30, according to a draft of the legislation called the Paycheck Protection Program Extension Act.
It would also “allow borrowers to use loan funds to purchase personal protective equipment for employees and to pay for adaptive investments needed to reopen safely,” according to a summary of the bill.
These “adaptive investments include modifications to a commercial property to comply with public health guidelines from CDC and other relevant federal agencies” and can include “creating or expanding a drive-through window, physical barriers such as sneeze guards, ventilation system upgrades, etc.”
As its currently structured, borrowers must use their PPP loans for payroll and other approved expenses like mortgage interest to get the loans forgiven.
The bill also clarifies that borrowers who maintained payroll for eight weeks won’t forfeit loan forgiveness because of the extension, and ensures that lenders aren’t held liable for borrowers’ certifications made for the loans.
While lawmakers supporting the bill hoped it would be voted on late Thursday, Senate Majority Leader Mitch McConnell ended the session without a vote, pushing the earliest opportunity to June 1, NBC News reported. Meanwhile, the House may vote on its own effort to fix PPP next week that gives borrowers 24 weeks to use the funds.
The proposed bill gives small business owners more flexibility in how they use the loans, addressing several persistent complaints about the $660 billion effort.