Millions of small business owners all over the country have received small business loans from the Paycheck Protection Program to help cover expenses, payroll and more.  But one of the requirements has proven difficult as the country struggles to contain the virus and reopen safely--the PPP loans have to be spent within 8 weeks of receipt. But a group of bipartisan senators are pushing back to increase the spending period.

Challenges to Spending

The PPP loan has to be spent mostly on payroll (75%) with 25% reserved for other expenses like rent and mortgages. Business owners have just two months from the time they money reaches their bank accounts to spend it.  But with much of the country still on stay at home orders to some degree, it isn't always possible for businesses to hire employees back. The original PPP loan recommendations were based on the assumption that America would be back to "business as usual" this summer, but some of the country may be on lockdown for months to come.

In addition to stay-at-home orders, some people are unable to return to work due to illness of themselves or someone they care for, a lack of childcare or shuttered public transportation due to the virus. The CARES Act allows for them to stay on unemployment, but that doesn't help their employers to spend their PPP loan.  

Some business owners are paying staff who aren't working, even without revenue, but that's challenging for many small businesses that operate at small margins.

Spending Period Could Be Extended to 16 Weeks

New legislation, introduced by  Senators Marco Rubio, Ben Cardin, Susan Collins, and Jeanne Shaheen, would extend the spending period to 16 weeks instead of 8. It would also extend the deadline to apply for a PPP loan to the end of 2020 (the current deadline is June 30th).  Giving small business owners more time to spend their  PPP loans would allow more of them to be forgiven and hopefully preserve businesses that would otherwise shutter.

"[Small business owners]  need 12 weeks or 16 weeks because they are just starting to reopen now because there are different rules in different places," said Rubio in a video message.

What to Do in the Meantime

The proposed bill is not yet law, and the Senate is now on a weeklong recess for Memorial Day, so there won't be action on it for a few days.  We will keep you updated on the progress of the bill through Congress.

But for now, if you have received a PPP loan, make sure to check out our guide to make sure you get your loan forgiven. If you haven't applied yet but you'd like to, we can help! Try Skip Plus to get all the loan help you need, along with exclusive content, help with government services and more.