July 28, 2020
By Caity Witucki
Contributing Editor, Hot Topic Tuesday
Hot Topic Tuesday — Senate Introduces Continuing Small Business Recovery and Paycheck Protection Program Act
Yesterday, U.S. Senator Marco Rubio, Chairman of the Senate Committee on Small Business and Entrepreneurship, and Senator Susan Collins , a senior member of the Senate Committee on Appropriations and Committee on Health, Education, Labor, and Pensions, introduced the Continuing Small Business Recovery and Paycheck Protection Program Act.
The Continuing Small Business Recovery and Paycheck Protection Program Act would:
- Create a guaranteed long-term, low-interest working capital product by improving the terms of 7(a) loans for seasonal businesses and businesses located in low-income communities. The loans would equal 2 times the borrowers’ annual revenues, up to $10 million, with a maturity of up to 20 years at an interest rate that is fixed at 1%. These terms would apply to businesses with 500 employees or fewer that have seen their revenues decline by 50% or more in the first or second quarter this year compared to the same quarter last year.
- Provide funds to allow small employers that have seen their revenues decline by 50% or more receive a second PPP loan. The bill would limit these second forgivable loans to entities with 300 or fewer employees and create an additional set aside of funds for businesses with 10 or fewer employees to ensure equitable access to forgivable loans.
- Allow businesses to utilize forgivable PPP funds for personal protective equipment for workers, adaptive investments needed for businesses to operate safely amid the COVID-19 pandemic, and additional expenses.
- Simplify the forgiveness application and documentation requirements for smaller loans under $150,000.
- Provide $10 billion in long-term debt equity features to registered SBA Small Business Investment Companies (SBICs) that invest in small businesses with significant revenue losses from COVID-19, manufacturing startups in the domestic supply chain, and in low-income communities.
Congress plans to continue to negotiate over the measures included in the act before voting on the bill and sending it to President Donald Trump to be signed into law. While there is no deadline for Congress to pass the new stimulus bill, there are less than two weeks left until Congress adjourns for a month-long recess on August 10. A vote is expected before the break.