Paycheck Protection Program (PPP) Flexibility Act of 2020 Signed into Law
Statement by Distilled Spirits Council Chief of Public Policy Christine LoCascio
“The PPP has been a valuable lifeline to craft distilleries facing significant financial hardship from the closure of distillery tasting rooms and lost sales at restaurants and bars. The modifications to the PPP contained in this legislation will provide greater flexibility and stability to distilleries that have been deeply impacted by the COVID-19 crisis.
We appreciate the efforts of the administration and Congress to make the necessary changes to this program to increase its effectiveness and positive impact.
The pandemic’s economic toll on small distilleries across the country has been devastating. According to a recent survey of craft distillers, two-thirds of respondents do not believe they will be able to sustain their businesses for more than 6 months.
Distillers have a long road ahead toward economic recovery. Programs such as PPP give these small businesses the hope and critical resources needed to navigate the difficult months to come.
We will continue to advocate for additional legislative measures to support distillers in need including the deferral of federal excise taxes; permanent enactment of the Craft Beverage Modernization and Tax Reform Act’s lower federal excise tax rates; suspension of tariffs on beverage alcohol; creation of an industry stabilization fund; and continued robust support for necessary Small Business Administration-administered no- and low-interest programs.
The newly enacted Paycheck Protection Program (PPP) Flexibility Act of 2020 makes a number of modifications to the PPP initially enacted as part of the CARES Act in March 2020.
This new law:
- Extends the maturity period for new PPP loans to a minimum of five years
- Extends the covered period from 24 weeks after origination or December 31, 2020 (whichever is first), providing businesses a longer period of time to use their PPP loans on eligible expenses
- Provides an exemption to the proportional reduction in loan forgiveness to the number of full-time employees retained recognizing many employers’ difficulties in hiring/rehiring and inability to return to the same level of business activity as before the pandemic
- Establishes that a recipient shall use at least 60 percent of the loan for payroll costs and up to 40 percent for eligible non-payroll costs, a reduction from the 75 percent requirement the Small Business Administration has maintained
- Extends the deferral period until the date on which the amount of forgiveness