NSBA Talks PPP with Sen. BennettSeptember 23, 2020
On Sept. 22, the NSBA Board of Trustees held a virtual meeting to discuss general business, pandemic recovery, elections and much more. On the call the leadership heard from Sen. Michael Bennett (D-Colo) on his RESTART Act (S. 3814) which would expand the Paycheck Protection Program (PPP). Specifically, it would provide another round of loans to small businesses who have experienced revenue declines of 25 percent or more, extend the limit to six months of operating expenses, and broaden forgiveness provisions for the loans. Companies would have 7 years to repay these loans.
The bill also would create a new line of short-term (7 years maximum) U.S. Small Business Administration (SBA) loans for small- and mid-sized businesses affected by COVID-19 which would: provide a 100 percent guarantee; eliminate payments on principal for the first two years; and allow companies with fewer than 5,000 employees to access up to 45% of gross receipts for 2019. These loans funds would not be subject to PPP forgiveness rules.
During his conversation with NSBA, Sen. Bennett highlighted the importance of small businesses to not only his state of Colorado, but the entire nation. He also highlighted the massive hardships small businesses have faced and, while the PPP has provided substantial aid to many small businesses, more is needed.
Bennett also underscored the bipartisan support his bill has with Sen. Todd Young (R-Ind.) as the lead co-sponsor and 57 current cosponsors, both Republicans and Democrats. Despite the partisan impasse in the Senate, deepened by the passing of Justice Ruth Bader Ginsberg, Sen. Bennett believes there is broad enough support in the Senate to pass the legislation.
Members of the NSBA Board of Trustees urged Bennett to ensure his law would be proscriptive to regulators and ensure the SBA would craft the loan to the intent of the law, particularly given some of the differences in guidance from Treasury and SBA and the law passed by Congress enacting the PPP.
Another key issue raised was the tax deductibility of PPP loans. Currently a loophole would make loan funds through PPP taxable, a significant problem for NSBA’s membership. Sen. Bennett said he isn’t clear on whether or not legislation will be passed to address this issue, but that he will look into this loophole.