Senate Bill Would Expand PPP

September 9, 2020

This week, the Senate is likely to take up a slimmed-down version of another COVID-19 relief legislation. The bill, the Delivering Immediate Relief to America’s Families, Schools and Small Businesses Act would, among other things, create another round of the Paycheck Protection Program (PPP) and simplify the forgiveness rules for those funds.

It is unclear whether the legislation, the so-called “skinny” COVID-19 bill, will even advance in the narrowly-divided Senate where Republicans are working behind the scenes to garner 51 votes. Senate Democrats remain opposed to the Republicans’ targeted approach, and are calling for at least $2 trillion in new spending. Senate Democratic leaders have threatened to block legislation that falls short of their more broad plan and it is clear that Senate Majority Leader Mitch McConnell (R-Ky.) will not have the 60 votes necessary to defeat a filibuster.

Specific to small businesses, Title IV of the bill would:

  • Create a 2nd round of PPP with reforms to require new applications show revenue loss and maintain loan documents consistent with IRS requirements;
  • Allow small businesses (including self-employed individuals, sole-proprietors, and independent contractors) with 300 or fewer employees that have incurred at least a 35 percent reduction in gross revenue in a 2020 quarter relative to the same 2019 quarter to receive a second PPP loan;
    • Second PPP loans will be equal to 2.5X average monthly payroll costs, with a maximum loan value of $2 million;
    • Funds can be used as outlined under existing regulations with expansions to cover certain worker protective, supplier, and operational expenses;
  • Simplify the forgiveness application process for current and future PPP borrowers receiving loans of under $150,000 or less; and
  • Provides $50 million in additional resources for audits using existing PPP funding.

NSBA is pleased to see some improvements made through the amendment, in our letter to the Senate, we recommended they include businesses that demonstrate a 20-30 percent reductions in gross revenues to participate in this second wave of funding, making it much more effective across the diverse sectors and the various sizes who continue to need the help. We further suggested they provide even greater flexibility for the smallest companies. Additionally, NSBA is urging lawmakers to provide greater flexibility to spend forgivable PPP funds on all normal business expenses (rent, software, equipment, suppliers, and vendors) not just the ones currently defined.

Lawmakers face a significant amount of work to complete before leaving in just a few short weeks for the campaign trail: COVID-19 stimulus, the looming government funding deadline (Sept. 30) and the 2015 surface transportation bill which expires the same day.