A bipartisan group of senators unveiled a proposal this week to allow the nation's smallest businesses to receive additional aid through the Paycheck Protection Program, a key coronavirus rescue fund that's poised to expire at the end of May.
Under the bill, introduced Tuesday by Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin, D-Md., thousands of self-employed Americans could qualify for a bigger loan through the Paycheck Protection Program, the massive relief program that provides forgivable loans if businesses maintain payroll.
"Congress must pass this bill as quickly as possible so eligible small businesses have time to secure the aid they need before PPP closes on May 31," Cardin said Tuesday.
Self-employed individuals, independent contractors and sole proprietors could request a recalculation based on gross income – potentially increasing the size of their loan.
"The Biden administration has taken steps to make PPP more useful to farmers, ranchers and sole proprietors so making the changes retroactive is a matter of basic fairness," Cardin said.
The legislation, co-sponsored by Sens. Susan Collins, R-Maine, and James Lankford, R-Okla., would not extend the May 31 deadline for loan applications and would not appropriate additional money to the fund. As of last week, the program had about $44 billion remaining from the $292 billion allocated by Congress this year, SBA data shows.
The program, created just weeks after the pandemic took hold, has delivered about 9.9 million loans worth close to $762 billion in government-backed loans to small businesses over the year.
Congress voted last month to extend the program from March 31 to May 31, but did not appropriate additional funding – even though the remaining money will likely run out before the next deadline.
Any business with fewer than 500 employees can apply for a first-time loan, and any business that already received a PPP loan can apply for a second if it employs fewer than 300 workers.
Businesses can choose to spend the funds over any period of time between eight and 24 weeks. At least 60% of the money must be spent on maintaining payroll in order to receive full forgiveness.
The interest rate is still 1%.