Latest round of PPP loans have gone to 6,000 Maine businesses so far

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Image / U.S. Senate Rules Committee video screen image U.S. Sen. Susan Collins, R-Maine, said Wednesday that more than 6,000 Maine businesses have received $462 million in the second round of PPP lending.

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By Peter Van Allen

The Paycheck Protection Program’s second round of loans have totaled $462.6 million in Maine — and banks are still making loans.

So far, 6,116 Maine small employers have been approved for loans, U.S. Sen. Susan Collins, R-Maine, said in a news release Wednesday. The numbers are based on data from the U.S. Small Business Administration.

Maine financial institutions are still writing loans. Eligible small businesses can receive a forgivable loan for the first time; hardest hit small businesses may receive a second forgivable loan, Collins said.

In the first round of PPP lending last year, 28,000 Maine businesses received $2.3 billion in loans, supporting 250,000 jobs.

Collins helped secure $284.5 billion for PPP in COVID-19 relief law passed in December.

“The PPP is sustaining jobs across our state and providing essential support to Maine’s small businesses that have endured an extraordinarily challenging year,” Collins said in the news release.

“I strongly advocated for reopening the application process for first-time PPP borrowers and allowing the hardest hit small businesses to receive a second forgivable loan," she added. "I encourage small businesses and nonprofits with 300 or fewer employees and revenue losses due to COVID to contact their financial institution to apply for a second forgivable loan to help keep their doors open and save the jobs of their employees.”

A key element of the loans is being tax-free, at least on the federal level. Some states, including Maine, plan to tax some of the loan recipients for the proceeds.

Earlier this week, Gov. Janet Mills offered a compromise plan that would exempt most small businesses that received PPP loans from being taxed. Originally, the Mills administration sought a tax on all PPP loans, which would have generated $100 million in revenue. Under the compromise plan, the state would generate about $18 million in revenue, taxing only the larger recipients.

Mills wants to make the first $1 million of PPP proceeds tax-free, an amount that would exempt 99% of the Maine recipients from paying a levy on proceeds as if they were income. Businesses that received over $1 million in PPP loans during 2020 would be taxed only on the amount above that threshold, according to a news release Tuesday morning.

Who is eligible for PPP loans

Small businesses that employ 300 or fewer people and that experienced a 25% or greater gross revenue loss between comparable periods in 2019 and 2020 due to COVID-19 are eligible to apply for a second forgivable PPP loan.
In addition, forgivable overhead expenses are expanded to include supplier costs and investments in facility modifications and personal protective equipment needed to operate safely.
In recognition of the severe impact that COVID-19 mitigation measures have had on the hospitality sector, in particular, the formula used to calculate the maximum forgivable loan amounts for second draw loans is enhanced for restaurants and hotels to equal 3.5x average monthly payroll.
Small business owners that did not receive a PPP loan in the first round are also eligible to apply.

Source: Office of U.S. Sen. Susan Collins