On Monday, Senate Republicans announced their plan for another wave of the Paycheck Protection Program as part of the HEALS Act. They want the “worst affected small employers” to get a second loan.
Senator Ben Cardin (D-MD) said he strongly agrees with the way Republicans presented their proposal during an interview by Yahoo Finance on Tuesday.
Cardin noted that “there are many similarities” between his Democratic plan and the Republican plan.
Cardin has long lobbied for a second wave of PPP loans and in an interview with Yahoo Finance in May said “8 weeks will not be enough.” Cardin is the top Democrat on the Senate Small Business Committee, oversees the Small Business Administration and the program along with Senator Marco Rubio (R-FL).
The PPP program was created with $ 349 billion in funds when the CARES Act was enacted in March. It then received $ 310 billion in additional funds in April. As of Monday, the program had provided nearly $ 520 billion in forgivable loans.
“When Senators Rubio, Cardin, Shaheen and I developed this program in March, we had no idea how long economic closings would last to mitigate the spread of COVID-19,” said Senator Susan Collins (R-ME) in her comments. Monday.
Under the Republican plan, companies with fewer than 300 employees who have seen a 50% or more decrease in revenue would gain access to loans. Cardin pointed to a still-to-be-negotiated point: “The Republican bill has it at 300, our bill has it at 100 or less,” he said.
In addition to the option of a second loan, lawmakers also want to simplify the loan forgiveness process. Based on an invoice summary, borrowers will have to complete significantly less paperwork, especially for loans under $ 150,000; But companies must keep their records, as the SBA reserves the right to “review and audit these loans to ensure fraud.”
In a statement released shortly after Collins and Rubio spoke, the President and CEO of the Consumer Bankers Association, Richard Hunt, asked for more details on how the loan forgiveness process would work. Hunt said the most basic current process requires significant resources from a small business, and “Congress must improve the language of forgiveness by providing clear and prescriptive guidance.”
Cardin has lobbied the SBA to be more transparent about the program. “I look forward to receiving additional information gathered during the loan forgiveness process to help us better understand how PPP is reaching small businesses in underserved communities,” he said recently.
The Republican plan also includes new provisions on how companies can spend PPP money. Senator Collins noted that companies will be able to use funds for things like improving their HVAC system, buying Plexiglas masks or shields, or adding outdoor seating to encourage social distancing.
A summary of the plan points to other permitted uses, such as improving human resources or accounting systems or costs related to recent social unrest.
The Republican plan would also set aside money for employers with 10 or fewer employees “to make sure the money doesn’t run out without that group of small businesses getting the assistance they need,” Rubio said recently. Cardin has also noted a focus on microenterprises with 10 or fewer employees.
Even if both sides agree on the final details of the PPP loans, implementation will surely have to wait for a larger and much more thorny stimulus bill to be negotiated. Senate Majority Leader Mitch McConnell (R-KY) warned that the process could take weeks.
August 8 is a key deadline for PPP-focused legislators; As it is now, it is when the program will no longer be able to accept new requests. Regardless of the long wait, Cardin is optimistic that “if we can get a bill to the finish line, it will include a second round for PPP.”
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