Assemblywoman Christy Smith, along with 23 other California state assembly members, called for the California Congressional delegation’s attention to the loan forgiveness period of the federal Paycheck Protection Program (PPP) on Friday.

Currently, the loan forgiveness period is eight weeks, which could be coming as soon as the end of the month for those who applied as soon as the funds became available at the end of March. The loan forgiveness applies to businesses that reopen after the eight weeks.

“Given the Governor’s guidelines for reopening and the latest projections coming out of both the California Department of Public Health, and from many of our county departments of public health, it would be irresponsible to expect or insist that all California businesses reopen even in the one to three months,” reads the letter to California Congress delegates.

Smith and the other assembly members argue that requiring businesses to reopen after the eight week period makes a difficult decision for the owners while undoing the help the PPP  provided.

“By maintaining the eight-week requirement, we are putting these businesses between a rock and a hard place, and in the process undoing some of the good that the PPP provided,” reads the letter. “We are asking them to owe operating expenses while they are unable to generate income. We should not be creating a perverse incentive for employers to put workers and the public at risk.”

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“PPP was a much-needed lifeline to keep many hard-working Americans afloat; however, the looming deadline will undo much of the good that has been created,” Smith said. “I’ve spoken to many small business owners and business leaders throughout my district, and it’s clear this arbitrary and untenable time frame adds more harm to local businesses.”

Loan payments are set to be deferred for six months. 75 percent of the loan has to be spent on payroll-related costs, while any amount of the loan spent over the 25 percent mark for non-payroll costs will not be forgiven, according to officials from Mission Valley Bank.

“Small businesses are the backbone of our local economies, but many economic uncertainties are wringing them out of operation,” Smith said.

See Related: What Can Paycheck Protection Program Funds Be Used For?

One of the small business owners and recipients of the PPP loan expressing concern about the fast-approaching deadline is Lisa Eichman, owner of Gymnastics Unlimited in Santa Clarita.

“As the owner of a gymnastics school who is unable to operate while the safer-at-home orders remain in place, we are prevented from seeing any benefit from the forgiveness features of the PPP.” Eichman said. “An extension with provisions to use the funds will be critical for us to begin planning how we can safely reopen and get back to providing much-needed activities for more than 1,200 school-age children in our community. Assemblywoman Smith has been in regular contact with us and other businesses like us to ensure we have not been forgotten. We are truly grateful for her direct support of her hometown constituents.”

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