Small businesses would have more flexibility to use coronavirus aid over a longer period under bipartisan legislation introduced Thursday by U.S. Sens. Michael Bennet, D-Colo., and Todd Young, R-Ind.
The bill — dubbed the Reviving the Economy Sustainably Towards a Recovery in Twenty-twenty (RESTART) Act — would rework the $670 billion Paycheck Protection Program to give businesses hit hardest by the pandemic more time to use emergency funds while still qualifying for loan forgiveness, according to a summary provided by Bennet's office.
It would also establish a new program to cover expenses through the end of the year for small businesses that suffer significant revenue losses.
“This is the first and only bipartisan proposal that supports the hardest-hit businesses by fixing the Paycheck Protection Program and providing relief through the rest of the year,” Bennet said in a statement. “Based on input from business owners across Colorado, we’ve proposed a bill that provides the flexibility they need to weather the next six months and get their businesses back up and running.”
A Bennet spokeswoman said the legislation addresses concerns raised by owners of restaurants, gyms, hotels, stores and other businesses.
Owners of businesses hit hardest by stay-at-home orders and other responses to the pandemic argue that the massive forgivable loan program, administered by the Small Business Administration, lacks needed flexibility as the crisis nears its fourth month.
The PPP loans, key elements of two rescue packages Congress passed in March and April, provided loans of up to $10 million to businesses with up to 500 employees. Under the original legislation, loans would be forgiven if the businesses used most of the money to keep employees on payroll for eight weeks, a deadline fast approaching as the economy continues to reel.
Bennet's and Young's bill proposes extending the period to 16 weeks for businesses whose revenues have dropped by at least 25%.
“The Paycheck Protection Program has been a tremendous asset, providing nearly $10 billion in loans to Indiana recipients, and saving more than 50 million American jobs. However, after speaking with some of the hardest hit businesses, it’s clear there are fixes needed to help more job creators navigate this pandemic. " Young said in a statement.
"The RESTART Act addresses these issues by providing longer-term loans and more flexibility so that the businesses who have suffered the greatest economic hardship can resume essential operations. The RESTART Act provides the next phase of recovery to allow businesses to open, paychecks to continue, and people to get back to work."
The bill includes a program to provide loans to cover payroll, benefits and fixed operating expenses for impacted small businesses through the end of the year, with a share of the loan forgiven based on 2020 revenue losses. The remainder of the loan, the senators said, could be repaid over seven years, with no payments due for the first year.
"This program is designed to provide small- and medium-sized businesses with loans to get their businesses going again, and ensure that they receive loan forgiveness to help fill in a loss in revenues," Bennet's office said in a release.
It's one of a number of PPP fixes making their way through Congress, including a bipartisan House bill sponsored by U.S. Reps. Dean Phillips, D-Minn., and Chip Roy, D-Texas. That bill, which could see a vote next week, would stretch the deadline to forgive PPP loans to 24 weeks and make other adjustments to the program, such as removing the requirement that 75% of loans be spent on payroll to qualify for forgiveness.
U.S. Sen. Marco Rubio, R-Fla., who heads the Senate Small Business and Entrepreneurship Committee, said Wednesday there is "unanimity" among lawmakers to give companies more time and has said the Senate could act as soon as this week.