Republicans want to send second round of PPP loans to smaller, hard-hit businesses

The lead authors of the popular small business lending initiative known as the Paycheck Protection Program (PPP) want the next round of loans to focus on smaller businesses that have suffered deep losses because of the coronavirus pandemic.

Senate Small Business Committee Chairman Marco Rubio (R-Fla.) and Sen. Susan Collins (R-Maine) released their plan Monday afternoon as part of a broader rollout of GOP proposals for the next phase of coronavirus relief legislation.

The plan would allow the hardest-hit small business owners to receive a second PPP forgivable loan.

Rubio and Collins say another round of PPP loans should be limited to businesses with no more than 300 employees, coming down from the 500-worker limit originally set in the third coronavirus stimulus bill passed in March. 

The reform plan will also include a revenue test, limiting loans to businesses that have lost at least of 50 percent of revenue compared to a previous year’s quarter.   

It would also expand the list of expenses for which PPP loans would be forgiven to include investments to protect employees and customers such as masks, plexiglass shields, and improved H-VAC climate systems.

“We are now beginning to see that as the PPP funds are being exhausted, some companies are having to face once again the potential of having to lay off some of their workers. And so that’s why it is time for a second round of PPP assistance,” Rubio said on the Senate floor Monday, unveiling the plan.

A portion of PPP loans will be set aside for businesses with 10 employees or less. 

“Some of these funds will be set aside for employers that have ten employees or less to make sure that the money doesn’t run out without that group of small businesses getting the assistance they need,” Rubio said. 

Collins, who is up for re-election in November, said the program has been critical to her home state’s economy.

“More than 76 percent of Maine’s small businesses have reported receiving a PPP loan. An estimated 76 percent of Maine jobs have been supported by this critically important program,” Collins said on the Senate floor Monday afternoon.

Collins also unveiled some of the details of the program during a radio appearance Friday. 

“It would give another round of Paycheck Protection Program forgivable loans to our small employers that keep employees paid, they either retain them, recall them or keep sending them paychecks,” Collins said when she unveiled her plan Friday on Maine radio. 

Collins noted that the eight weeks of the Paycheck Protection Program set up by the CARES Act has expired.

She says the new GOP proposal “would allow a second PPP loan for the hardest hit businesses.”

“They would have to be under 300 employees, they couldn’t be publicly traded and they would have to show that they’ve had a revenue decline of 50 percent compared to the similar quarter last year,” she said.

“I can tell you, having talked to countless restaurant owners and B and B and inn and hotel operators, that many of them will easily meet that threshold,” she said.

Collins said small business owners say the first round of PPP loans helped save their businesses but they’re still under threat. 

“There are businesses out there that need a second loan to survive,” she said.

Rubio and Collins are also proposing special longer-term, low-interest loans for businesses in low-income neighborhoods.