The International Franchise Association (IFA) today urged the House of Representatives to support H.R. 7010, the Paycheck Protection Program (PPP) Flexibility Act.
Sponsored by Reps. Dean Phillips (D-MN) and Chip Roy (R-TX), the legislation would make needed improvements to the PPP loan program to ensure that loan terms better benefit the small businesses they are designed to help.
“The PPP loan program was designed as a lifeline for small businesses, but the program’s limitations imposed by regulators were sinking them. By increasing the flexibility and length of time franchisees can use PPP loans, this bill is the buoy that will keep small businesses and their employees afloat until they can safely and legally reopen,” said Matt Haller, IFA Senior Vice President of Government Relations and Public Affairs.
“With many borrowers’ 8 week period coming to a close, America’s 733,000 franchise businesses sorely need this bipartisan legislation. IFA commends Reps. Phillips and Roy for their leadership, and hopes the Senate will take up the bill when they return next week.”
H.R. 7010 would address the top PPP concerns voiced by franchises in a recent IFA survey by:
- Allowing forgiveness for expenses beyond the 8-week covered period to 24 weeks and extending the rehiring deadline.
- Providing a “Borrower’s Choice” provision, which allows those who received PPP loans prior to enactment to choose for the covered period of their loan to either last 8 weeks or 24 weeks from origination.
- Increasing the current limitation on nonpayroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent.
- Lengthening the loan maturity date from 2 to 5 years for new loans.
America’s 733,000 franchise businesses together employ more than 8 million American workers. Three out of every four franchises have fewer than twenty employees.
Celebrating 60 years of excellence, education, and advocacy, the International Franchise Association is the world's oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 733,000 franchise establishments that support nearly 8.4 million direct jobs, $787.5 billion of economic output for the U.S. economy and 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology and business development.