Small business owners can get a second bite of the coronavirus relief apple under a bill that would expand the Paycheck Protection Program.
The Paycheck Priority Protection Program (P4) Act would allow businesses with fewer than 100 employees to apply for a second loan if they have exhausted (or are about to exhaust) their first PPP loan and can show a 50% revenue loss due to the COVID-19 pandemic.
Democrats have introduced Senate and House versions of the bill, which enjoys bipartisan support.
“Congress must once again act urgently to support our most vulnerable small businesses during this crisis, so that our economy can recover as quickly as possible from the pandemic,” said Democratic Maryland Senator Ben Cardin, co. -sponsor of the bill.
Congress provided $659 billion for the PPP, the centerpiece of the $2 trillion CARES Act. It offered partially repayable loans to small businesses to cover staff costs for eight weeks.
But lawmakers say small businesses are still struggling because the COVID shutdown has lasted longer than originally anticipated when Congress implemented PPP.
“It has become clear that many employers in vital industries need more federal help through the Paycheck Protection Program,” said Sen. Chris Coons, a Democrat from Delaware.
Bill P4 would set aside the lesser of $25 billion or 20% of PPP funds for employers with fewer than 10 employees and businesses in underserved and rural communities. It also directs the Small Business Administration to provide guidance to lenders to prioritize smaller businesses.
Publicly listed companies would not be eligible and hospitality and accommodation businesses with multiple locations would be limited to a total loan amount of $2 million.
Kevin Kuhlman, vice president of federal government relations for the National Federation of Independent Businesses, said the 50% revenue loss provision could be a problem for many small businesses.
“If a business has had a 25% or 30% revenue loss and they have high fixed costs or high accounts payable, they’re also going to struggle,” he told Yahoo Finance.