MEMA signed a joint letter with several other trade associations urging structural changes to the Paycheck Protection Program to help small businesses remain open after stay-at-home orders are lifted. In the May 21 letter sent to congressional leaders, Secretary of Treasury Steven Mnuchin, and Jovita Carranza, administrator of the Small Business Administration, MEMA asked that the following changes be made to the program:
Repeal the 75-25 percent rule, which requires 75 percent of proceeds from the PPP to cover payroll costs, leaving 25 percent for non-payroll costs;
Extend the eight-week period to calculate loan forgiveness;
Extend the June 30 safe harbor date for rehiring and restoration of pay.
“The current rules made sense when the program was created, and it was anticipated that stay-at-home orders would last only a few weeks,” the letter states. “However, their implementation in the current environment is making it harder for small businesses to survive. Small businesses that close permanently will never be able to rehire their employees. These three modest changes would help ensure that the liquidity provided through the PPP can be deployed in a manner that is most likely to allow a small business to remain operational.”
Read the full letter here.