By: Patrick Rehkamp
6/18/2020
U.S. Rep. Angie Craig, D-Minn., wants businesses that already received a Payroll Protection Program loan to get another one if they’re still reeling from the economic fallout. Currently, businesses can only receive one PPP loan. Craig introduced a bill Thursday that would allow small businesses to receive a second PPP loan. Even though more than $100 billion currently remains in the program, Craig said many small businesses across the country have already spent funding from the first round and are just starting to open or are open in a reduced capacity.
“This is particularly for our restaurant industry,” she said, adding that retailers are in need too. “I hope this would be a lifeline for businesses that have already exhausted their first PPP loan.”
Craig said she’s working on getting Republican support, but the Small Business Committee — which she’s a member of, has expressed interest in the bill. Congress has shown a willingness to alter key components of the original PPP, having advanced thePaycheck Protection Program Flexibility Act earlier this month. But the HEROES Act, which the House passed in May, has not been taken up by the Senate. The funding for this P4 legislation would come from the existing pool of money that has yet to be expended by the SBA — about $130 billion remains out of the $649 billion earmarked for loans under the program.
The proposed rules for a second loan are stricter than the original PPP loans. Some of the requirements for potential recipients of another loan:
- The borrowers must be self-employed or have 100 or fewer employees, and have suffered more than a 50 percent loss in revenues compared to a quarter in the previous year or another relevant period.
- They must have exhausted, or be on pace to exhaust, their first PPP loan and certify they need the funding to support ongoing operations for payroll and eligible non-payroll costs.
- Funding amounts and calculations would mirror the previous PPP requirements for qualified businesses. The second loan can’t exceed $2 million
Craig said the U.S. Small Business Administration fumbled some of the rollouts of the PPP initiatives, but since businesses now have years to pay the money back and months to seek forgiveness, she’s hopeful it can handle another round of funding. “I think the SBA can catch up on” the workload, she said. “If we can save this country from a depression — that is well worth the investment.”