Several plans are in development on Capitol Hill to refine and improve the Paycheck Protection Program (PPP). The proposals, drawing advocates from both sides of the aisle, seek to provide small- and mid-sized businesses with additional support during the pandemic.
A proposal from Sens. Michael Bennet (D-CO) and Todd Young (R-IN) includes a new RESTART Program to provide funding to jumpstart the hardest-hit businesses for the remainder of 2020 and provide loan forgiveness as a backstop against ongoing difficulties. It would also make enhancements to the PPP to support restaurants and other deeply affected businesses. For more information on the Bennett-Young plan, click here.
“With a simple change to the Paycheck Protection Program—doubling the amount of time hard-hit businesses have to deploy their funds—we can help restaurants, gyms, mom-and-pops, and other Main Street businesses weather these difficult times,” says Bennet. “At the same time, we need a long-term strategy to help businesses ramp back up in the second half of the year and provide some assurance they’ll be able to survive the uncertainty they face. Our new RESTART Program will provide flexible funding with a longer repayment period to Main Street businesses that took a big financial hit, so they can relaunch and rehire their workers when it’s safe to do so.”
Young adds, “The Paycheck Protection Program is working for many small businesses, but we know more needs to be done. The RESTART Act will go a step further by helping to provide longer-term loans to businesses and nonprofits that are experiencing economic hardship due to the coronavirus pandemic. Millions of Americans have lost their jobs, and our goal is to revitalize the economy and get them back to work as quickly as possible.”
Sens. Bob Menendez (D-NJ) and John Cornyn (R-TX) are leading a bipartisan group of their colleagues in urging U.S. Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza to raise the PPP’s non-payroll forgiveness cap from 25 percent to 50 percent. PPP loans allow loan proceeds used towards payroll, utilities, mortgage interest and rent payments to be forgiven when at least 75 percent of the loan is spent on payroll. The senators’ request to raise the cap would allow small businesses to spend up to 50 percent of the loan proceeds on the statutorily allowed non-payroll expenses such as rent, utilities and mortgage interest payments.
“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,” wrote the bipartisan group of senators to Secretary Mnuchin and Administrator Carranza. “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,” the senators added.
Joining Sens. Menendez and Cornyn in sending this letter were Sens John Barrasso (R-WY), Michael F. Bennet (D-CO), Marsha Blackburn (R-TN), Richard Blumenthal (D-CT), Cory A. Booker (D-NY), John Boozman (R-AR), Christopher Coons (D-DE), Richard J. Durbin (D-IL), Cory Gardner (R-CO), Kirsten E. Gillibrand (D-NY), Lindsey Graham (R-SC), Patrick Leahy (D-VT), Kelly Loeffler (R-GA), Kyrsten Sinema (D-AZ), Chris Van Hollen (D-MD), Roger F. Wicker (R-MS) and Ron Wyden (D-OR).
