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Discus welcomes updates to PPP loan rules
Trade body the Distilled Spirits Council of the US (Discus) has welcomed updates to the Paycheck Protection Program (PPP) loans, which it believes will provide more flexibility and stability for distilleries impacted by the Covid-19 crisis.
Discus has welcomed amendments to PPP loan rules, which it believes will benefit craft distillers in the US
The PPP Flexibility Act of 2020 was signed by US president Donald Trump last week.
The new legislation includes an extended period of time (24 weeks after origination or 31 December 2020, whichever comes first) for businesses to use their PPP loans on eligible expenses, as well as an extension on the maturity period of PPP loans to a minimum of five years.
It also sets out that recipients will use at least 60% of the loan for payroll costs, down from the 75% previously stipulated, and up to 40% for eligible non-payroll costs.
Christine LoCascio, Discus chief of public policy, said: “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 programme 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 six months.
“Distillers have a long road ahead toward economic recovery. Programmes 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 stabilisation fund; and continued robust support for necessary Small Business Administration-administered no- and low-interest programmes.”