The U.S. Senate has passed legislation that would provide more flexibility in use of the federal Paycheck Protection Program, which is providing emergency loans to small businesses -- including pathology practices -- during the COVID-19 pandemic.
The Senate voted to pass the Paycheck Protection Program Flexibility Act (HR 7010) on June 3, following passage by the House of Representatives on May 28, and the bill now goes to President Donald Trump, who is expected to sign it.
Introduced by Rep. Chip Roy (D-TX), Rep. Dean Phillips (D-MN), and other lawmakers, the bipartisan legislation would allow more flexibility in emergency loan funding, extending the time period for use of funds beyond eight weeks, and offering more freedom to use funds for nonpayroll expenses.
The CAP is pleased that the House passed the Paycheck Protection Program Flexibility Act of 2020, as it provides greater flexibility to pathology practices that received small business assistance loans: https://t.co/GLubpoBClF. pic.twitter.com/fyGYzVSxcW— CAP Advocacy (@CAPDCAdvocacy) June 2, 2020
The Paycheck Protection Program was created through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and later expanded through the Paycheck Protection Program and Health Care Enhancement Act. The College of American Pathologists (CAP) strongly supports the Paycheck Protection Program and the proposed legislation making it more flexible. The program is suitable for pathology practices with fewer than 500 employees. In a recent policy update, CAP has highlighted advantages of the Flexibility Act for pathology practices, notably more latitude regarding use of emergency loans.
"The current terms of the loans require recipients to use 75% of the funds on payroll and up to 25% on other costs to qualify for loan forgiveness," CAP noted. "But the legislation would change the ratio to at least 60% on payroll and up to 40% on rent, overhead, and other costs."