Seasonal small businesses could get federal relief under proposed bill

Maine Senators Susan Collins and Angus King

File photos U.S. Sens. Susan Collins, R-Maine, and Angus King, I-Maine

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Seasonal small businesses who are still struggling to get back on track in the wake of the pandemic would become eligible for additional support under legislation introduced in Washington by Maine's two senators.

The Seasonal Business PPP Parity Act, recently proposed by U.S. Sens. Angus King, I-Maine, and Susan Collins, R-Maine, would modify a provision in the federal Paycheck Protection Program, which provides forgivable loans to small businesses.

The bill aims to provide additional funds for some seasonal businesses that applied in the early days of the program but were unable to access further relief because their loans had already been forgiven.

“The Paycheck Protection Program has been a lifeline for so many small businesses in Maine and across the country,” King said in a news release Monday. "This bill will ensure that struggling seasonal businesses receive every PPP dollar that they are qualified for, and help them continue to play a vital role in local communities for many years to come.”

Collins added that the new measure would provide welcome relief to small businesses "as they prepare for the busy summer season.”

Many seasonal businesses in Maine and nationwide obtained PPP loans as soon as the program opened in April 2020.

Under the program’s original rules, seasonal businesses had to calculate their loans based on their average monthly payroll for the period beginning Feb. 15, 2019, or March 1, 2019, at the election of the borrower, and ending June 30, 2019. Those windows did not fully capture the busy summer season, when staffing and payroll needs of many of Maine’s seasonal businesses increase dramatically.

A modification to the PPP later changed the time period, but only applied to seasonal businesses that had not applied for a PPP loan. The Seasonal Business PPP Parity Act would fix that by allowing them to apply for second-draw loans using the new calculation, even if they have already received a forgiven loan.

The Paycheck Protection Program, administered by banks, provided 28,000 Maine small businesses with $2.3 billion in 2020 alone. The program is set to end on May 31 under legislation signed by President Joe Biden in March.