Press Release

Gillibrand Joins Bipartisan Call On Trump Administration To Raise SBA’s PPP Non-Payroll Forgiveness Cap

May 7, 2020

U.S. Senator Kirsten Gillibrand today joined a bipartisan group of senators to urge the Trump Administration to raise the Paycheck Protection Program’s (PPP) non-payroll forgiveness cap from 25% to 50%. PPP loans allow loan proceeds used towards payroll, utilities, mortgage interest, and rent payments to be forgiven when at least 75% of the loan is spent on payroll. In a letter sent to U.S. Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza, Gillibrand and her colleagues called for the forgiveness cap to be raised in order to allow small businesses to spend up to 50% of the loan proceeds on the statutorily allowed non-payroll expenses such as rent, utilities and mortgage interest payments. 

“With many small businesses unable to meet their basic expenses, it’s critical that this administration do everything possible to keep these businesses from permanently shutting their doors,” said Senator Gillibrand“Increasing the threshold for non-payroll expenses will help our small businesses keep their workers employed and make their rent and utility payments. I’m proud that access to this loan forgiveness was included in the CARES Act and I will continue fighting to ensure that these programs work for those in need.”

The full text of the letters can be found here and below. 


Dear Secretary Mnuchin and Administrator Carranza:

Thank you for your tireless work in developing and implementing the Coronavirus Aid, Relief and Economic Security (CARES) Act. This critical legislation has bolstered our country’s defense against COVID 19 and provided a critical lifeline for businesses struggling to keep their doors open.  We commend your efforts to make the Paycheck Protection Program (PPP) and Economic Interruption Disaster Loans (EIDL) as effective as possible.  

As you know, the CARES Act provided a path to loan forgiveness for funds spent on payroll and other statutorily defined covered business expenses, conditioned upon business retaining or rehiring employees.  These provisions incentivize business owners to keep their employees, providing steady income for millions of Americans and limiting start-up costs after the pandemic.  However, the Small Business Administration (SBA) and Department of Treasury have created other conditions for loan forgiveness.  Specifically, regulations require that at least 75 percent of a PPP loan be spent on payroll, leaving no more than 25 percent to go toward the additional covered business expenses identified in the statute.  

The 25 percent threshold is problematic for several business sectors, especially those whose mortgage, rent, or utility payments constitute a large portion of fixed monthly expenses.  If they are unable to cover these expenses, they will have to decide between keeping their doors open, at personal financial risk, or closing shop and laying off employees.  These are businesses that will not recover.  Such an outcome would result in mass layoffs that would shift more Americans onto unemployment, presenting significant long-term costs to families, businesses, and states.

We ask that you exercise the power of your respective offices to ensure all business sectors are able to spend up to 50 percent of the loan proceeds on the statutorily allowed non-payroll expenses.  Access to loan forgiveness was a critical component of the CARES Act, and making it as effective as possible will help further the CARES Act’s goal of supporting small businesses while keeping American workers employed.  

Our offices stand ready to work with you in ensuring the full recovery of the U.S. economy and that the implementation of the CARES Act is equitable to all covered business sectors.  Please do not hesitate to contact us if we can assist in any way.