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Multiple Small Business Covid-19 Relief Legislation Introduced

There are two, new additional small business relief measures introduced in hopes of breaking the log jam on Capitol Hill. One, introduced by a bipartisan, bicameral group of lawmakers would provide roughly $900 in relief for small businesses, state and local government and provide dollars for vaccine dissemination. The other, proposed by Senate Majority Leader Mitch McConnell is estimated at $500B.

Both bills include additional funds for PPP and each tighten the requirements for receiving a PPP to ensure small businesses are able to access the additional funds. 

McConnell Proposal- Paycheck Protection Program Specifics

• $257.7 billion for the Paycheck Protection Program Second Draw Loans as voted on in the HEALS Act 

  • An additional $20 billion in the cost of the PPP to reduce revenue loss threshold under which businesses are eligible for PPP loans from the HEALS Act’s 35% to 25% 

  • An additional $40 billion in the cost of the PPP to increase PPP loan amounts spent by businesses on covered worker protection expenditures in order to help front-line sectors such as restaurants and personal services 

  • $15 billion for the grant program for shuttered venues 

• Defines eligibility for second PPP loans as small businesses with 300 or fewer employees and demonstrates at least a 25% reduction in gross revenues between comparison quarters in 2019 and 2020 

• Includes set asides to support first time PPP borrowers with 10 or fewer employees, second time borrowers with 10 or fewer employees, first time borrowers who have been made newly eligible and second time returning PPP borrowers 

• Provides a set aside for community lenders 

• The 60/40 cost allocation for payroll and non payroll costs to receive full PPP forgiveness would continue to apply 

• Expands forgivable expenses to include covered supplier costs, covered worker protection expenditures and covered operational expenses 

• Allows borrowers to select a loan forgiveness covered period between 8 weeks and 24 weeks during which to spend loan proceeds on forgivable costs

• Simplifies the forgiveness application process for smaller loans up to $150k while increasing the SBA's ability to audit and review forgiven loans. Appropriates $50 million to support audit authority 

• Eliminates the requirement that EIDL advances be subtracted from PPP forgiveness 

• Establishes a procedure in the bankruptcy process if the Administrator determines certain companies in Chapter 11 are eligible for PPP loans 

• Provides Farm Credit System Institutions with greater certainty and equity in PPP lending participation

Bipartisan, Bicameral Proposal- Paycheck Protection Program Specifics

• The bill would provide $300 billion to the SBA to allow the hardest hit small businesses to receive a second, forgivable PPP loan. Eligibility would be limited to small businesses with fewer than 300 employees that have sustained a 30% revenue loss in any quarter of 2020. 

• Loan forgiveness process is simplified for borrowers with PPP loans of $150k or less. 

• Set asides are included to ensure that underserved communities and smaller borrowers get the assistance they need.

Cheat Sheet: Side by Side Comparison McConnell Covid Relief v. “Problem Solvers” Relief Proposal