More help for certain small business owners could be on the way if Congress approves another round of Paycheck Protection Program (PPP) loans.
The Prioritized Paycheck Protection Program (P4) Act would allow businesses with fewer than 100 employees to get a second loan. To qualify, they must have spent or expect to exhaust their first PPP loan and can demonstrate a 50 percent revenue loss due to the COVID-19 pandemic, Yahoo! Finance reported.
“Many small businesses will continue to struggle in the weeks and months to come,” Senator Ben Cardin (D-Maryland) told Yahoo. “Congress must once again act urgently to support our most vulnerable small businesses through this crisis, so our economy can recover as quickly as possible after the pandemic.”
Cardin, the ranking member of the Small Business Committee, along with Senators Chris Coons (D-Delaware) and Jeanne Shaheen (D-New Hampshire) introduced the bill in the Senate. In the House, U.S. Reps. Angie Craig (D-Minnesota) and Antonio Delgado (D-New York) ) introduced a similar bill.
The lawmakers say the nation’s small businesses continue to struggle as the shutdown continues.
“In conversations with small businesses up and down the state of Delaware, it’s become clear that many employers in vital sectors need more federal aid through the Paycheck Protection Program,” Coons said in a statement to Yahoo. “Even as closures are ending, countless Delaware businesses are struggling to survive this crisis.”
The senators told Treasury Secretary Steven Mnuchin about their plan to advance the proposal during a recent Small Business Committee. Mnuchin told lawmakers he would be open-minded about the plan, the report said.
Under the plan, publicly-traded companies are ineligible, and hospitality and lodging businesses chains would be limited to a total of $2 million in loans, the report said.
In addition, the bill would reserve the lesser of $25 billion or 20 percent of the cash for employers with fewer than 10 employees and businesses in underserved and rural communities.
“The economic fallout from COVID-19 has been an existential threat to our nation’s small businesses, and Congress cannot let up in its efforts to get them through this crisis,” said Shaheen in a statement. “This legislation prioritizes smaller businesses, particularly those in the restaurant and hospitality industries, which have been hit especially hard in recent months.”
Still, Kevin Kuhlman, vice president of federal government relations for the National Federation of Independent Businesses, told Yahoo the 50 percent revenue loss provision in the proposal could be a problem for many of its members.
“Even if a business has had 25 percent or 30 percent revenue loss and they have high fixed costs or accounts payable, then they’re going to be struggling as well,” he said.