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Senate passes Paycheck Protection Program reform bill

June 04, 2020

By Jennifer Garvin

Washington — The Senate passed a bill June 3 aiming to reform the Paycheck Protection Program to give small businesses more time and flexibility to use their funds.

In a June 4 Issues Alert email to members, ADA President Chad P. Gehani praised Congress for passing the Paycheck Protection Program Flexibility Act, calling it “good news” for borrowers who have or will receive funds from the Paycheck Protection Program — a loan established by the Coronavirus Aid, Relief, and Economic Security Act to provide incentives for small businesses to keep or rehire their workers. The bipartisan legislation previously passed the House on May 28 and will next go to the White House, where it is expected to be signed into law.

“As our profession slowly embarks on the path to recovery, dentists across the country are navigating the challenges of managing a small business during the COVID pandemic,” wrote Dr. Gehani. “The ADA has advocated for this increased flexibility for Paycheck Protection Program loans since the program was enacted. I, along with [ADA Executive Director Kathleen O’Loughlin], have sent letters of support for various versions of these bills as Congress was drafting the final compromise.”

The final bill included the following provisions the ADA and other dental organizations supported or advocated for:

• Increasing the Paycheck Protection Program loan forgiveness coverage period from eight weeks to 24 weeks. This will help dental practices make better decisions on when to spend the money based on what is best for their businesses.
• Deferring payroll tax for borrowers. Requiring that 50% of the deferred amount to be due Dec. 31, 2021, and the other 50% of the deferred amount to be due Dec. 31, 2022.
• Deferring Paycheck Protection Program loan repayment for 10 months instead of 6 months.
• Allowing borrowers to use 40% of Paycheck Protection Program funds to pay for nonpayroll expenses as opposed to only 25% and still be eligible for full forgiveness.
• Extending the rehiring deadline to offset the effect of enhanced Unemployment Insurance beyond June 30 of this year. This accounts for those businesses who have employees making more on unemployment and are facing a harder time rehiring staff as a result.

The final bill did not include a grant or tax credit to borrowers who received Paycheck Protection Program funds early nor did it give borrowers the ability to use funds to purchase personal protective equipment — two provisions the ADA advocated for.

“The ADA will continue to advocate for [those issues] and other policies that support dentists, dental team members and patients both during the pandemic and beyond,” Dr. Gehani concluded.

The ADA will be holding an upcoming webinar on Paycheck Protection Program loans. The ADA News will share details as soon as they are available.

Follow all of the ADA’s advocacy efforts in response to the pandemic at ADA.org/COVID19Advocacy.