Sens. Chris Coons, D-Delaware, Ben Cardin, D-Maryland, and Jeanne Shaheen, D-New Hampshire, all members of the Senate Committee on Small Business & Entrepreneurship, announced June 10 their intention to introduce the Prioritized Paycheck Protection Program Act.
The bill authorizes new lending under the Paycheck Protection Program to small businesses with 100 employees or less, including sole proprietorships and self-employed individuals. Eligible businesses must have already expended an initial PPP loan, or be on pace to exhaust the funding, and must demonstrate a revenue loss of 50% or more due to the COVID-19 pandemic.
“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,” said Coons. “Even as closures are ending, countless Delaware businesses are struggling to survive this crisis. That’s why I’m proud to work with Sens. Cardin and Shaheen on this legislation that will provide substantially more aid to the smallest, most vulnerable businesses that have been hardest hit by this pandemic. Only by aggressively targeting aid can we save our small businesses, the jobs they provide and the Main Streets that make our communities proud.”
The bill follows a “flash report” released by the Small Business Administration inspector general in May that found that SBA’s failure to issue guidance to prioritize underserved and rural markets in PPP “did not fully align” with the Congressional intent of the CARES Act.
To ensure that underserved and hardest-hit businesses can access P4 loans, publicly traded companies are ineligible for the loans; hospitality and lodging businesses with multiple locations are limited to an aggregate loan amount of $2 million; and the bill would reserve the lesser of $25 billion or 20% of PPP funds for employers with 10 or fewer employees, as well as small businesses in underserved and rural communities. The bill also directs SBA to issue guidance to give priority to businesses with 10 employees or fewer in the processing and disbursement of P4 loans, and requires SBA to request demographic information of P4 loan recipients.
Additionally, the P4 Act would provide eligible small businesses with as much as 250% of monthly payroll costs worth up to $2 million; prevent affiliated businesses with separate locations from receiving more than $2 million in aggregate P4 loans; and allow P4 recipients to apply for forgiveness of their loans eight weeks after the loans have been disbursed.
A one-pager on the bill is available at bit.ly/3fclTHy.