How the Paycheck Protection Program Flexibility Act Helps Small Businesses Like Mine
I currently run a civil construction and infrastructure company in Littleton, Colo.
As a businesswoman, I work in many areas, from human resources to financial planning to project management. Managing a business is a difficult balancing act in the best of times, and the COVID-19 pandemic has placed an immense strain on me and entrepreneurs all over the nation.
Since the pandemic began, one-third of U.S. small businesses stopped operating as of April, according to a Facebook survey. In two months, we went from the lowest unemployment rate in 50 years to the highest unemployment rate since the Great Depression. During that time, more than 40 million people have lost their job.
Every state is in the process of reopening, but most are moving at a cautious pace. Fifty-eight percent of small businesses remain at least partially closed nationwide. In my state of Colorado, Gov. Jared Polis is still weeks, if not months, away from fully lifting restrictions.
That is why the Payroll Protection Program (PPP) is so critical. The PPP, which was created as part of the CARES Act and set up by the Administration in early April, provides loans to small businesses heavily impacted by the economic shutdown. The program has distributed more than $510 billion worth of loans to more than 4.5 million small businesses, saving tens of millions of jobs.
Unfortunately, the program had a glitch – it wouldn’t allow businesses to use PPP funding after eight weeks. This was inevitably going to cause problems because of the slow pace of reopening. Congress and the Administration needed to come together on a legislative fix and they needed to do it before the fast-approaching eight-week deadline.
Thankfully, Congress passed a new bill fixing the problem just in time. On June 3, the Senate followed the House in passing the PPP Flexibility Act. This bipartisan bill expands the loan forgiveness period from eight weeks to 24 weeks, reduces the requirement that 75 percent of the loan be spent on payroll to a more reasonable 60 percent, and extends the program through the end of this year. On June 5, President Donald Trump signed this important bill into law.
Though the new terms of the loan will never make up for months of lost revenue, the fewer strings attached helps me keep my lights on while retaining my hard-working team. Equally important, my employees can keep the lights on in their homes and keep their families fed.
Perhaps the greatest victory of all is that, thanks to this legislation, my employees and I can maintain our sense of dignity and purpose. We won’t despair and we will be better able to help those in our community who are struggling to make ends meet.
At such a difficult time, it’s encouraging to see Congress work together in a bipartisan way on behalf of America’s small businesses. I am grateful to the lawmakers in both parties who voted for the PPP Flexibility Act and to President Trump for signing it. Their leadership is helping my business stay open and will potentially save millions of jobs.
Polly Lawrence is owner of Lawrence Construction, a fourth-generation, family owned civil-construction and infrastructure-management company in Littleton, Colo. She is a member of Job Creators Network, a small business advocacy group.