Small businesses still reeling from the coronavirus pandemic and the related economic lockdown could receive a second loan through the Paycheck Protection Program under new legislation introduced by a group of Democratic lawmakers.
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The Prioritized Paycheck Protection Program Act, introduced Thursday by Sens. Ben Cardin, D-Md., Chris Coons, D-Del., and Jeanne Shaheen, D-N.H., would allow businesses with fewer than 100 employees to tap the taxpayer-backed fund for a second time if they can prove that they lost half of their revenue as a result of the virus outbreak.
Eligible businesses must have exhausted their initial PPP loan, or be on pace to spend the aid in order to qualify for another loan. The bill would also extend the loan application deadline for businesses from June 30 to Dec. 30 or later. A companion bill has been introduced in the House.
“Many small businesses will continue to struggle in the weeks and months to come,” Cardin, the ranking member of the Senate Small Business Committee, said in a statement. “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.”
Large, publicly traded companies are ineligible to dip into the program again, and hospitality and lodging businesses with more than one location are limited to an aggregate loan amount of $2 million. At least $25 billion of the fund would be reserved for employers with 10 or fewer workers, as well as small businesses in underserved and rural communities.
Under the aid program, businesses can receive up to $10 million taxpayer-funded loans that will be forgiven by the federal government if at least 60 percent goes toward maintaining payroll. As of Friday, more than 4.5 million loans worth close to $514 billion had been distributed through the program. Congress allocated about $600 billion to the PPP, leaving roughly $100 billion left over in the fund.
But lawmakers and small business advocate that more aid, or more time, is needed to ensure there’s not a surge of bankruptcies. There are roughly 30 million small businesses in the U.S. that employ about 58.9 million workers, or about half of the total U.S. workforce.
The bill introduction comes as Congress and the White House grapple with a fourth coronavirus aid package to help the U.S. economy, still hurting from the lockdown, recover. Even as states gradually start to reopen their economies, and life slowly starts to return to normal, unemployment remains at a decades-high, with millions of Americans still out of work.
The Trump administration has previously said it does not intend to pass more relief measures until at least the beginning of July, although the Senate is not scheduled to return from its two-week recess until July 20.
Some options currently under consideration at the White House include a payroll tax cut, liability protections for businesses reopening during the outbreak, tax deductions or write-offs for individuals who take a vacation during a defined period of time, and a back-to-work bonus for unemployed Americans returning to their jobs.
So far, Congress has passed three massive stimulus packages totaling nearly $3 trillion to blunt the economic pain from the virus outbreak, including the $2.2 trillion CARES Act in March that established the PPP.
"We need to move from rescue assistance to more long-term economic growth incentives," Larry Kudlow, a senior White House economic adviser, told FOX Business at the beginning of June.