Small-biz relief program on track for 'mid-course correction,' King says
Courtesy / Office of U.S. Sen. Angus King
U.S. Sen. Angus King, I-Maine, told Mainebiz that the Paycheck Protection Flexibility Act would be one of the first orders of business for the Senate next week.
Small businesses aiming to make use of the federal Paycheck Protection Program to cope with the pandemic's economic fallout should be able to do so more easily under legislation making its way through Congress.
By a vote of 417-1, the U.S. House of Representatives on Thursday passed the Paycheck Protection Flexibility Act, a bipartisan bill that mirrors one introduced in the Senate last week by U.S. Sens. Angus King, I-Maine, and Steve Daines, R-Mont.
Speaking to Mainebiz by phone ahead of the House vote, King said the bill would be one of the first orders of business for the Senate next week.
"There's a good chance that by the end of next week there will be an improvement to issues with the PPP," King said. "I call it a mid-course correction."
He sees that as being particularly useful to businesses in the hospitality industry, some of whom have faced challenges meeting the requirements of the program in its original form.
The program aims to tweak the Small Business Administration's Paycheck Protection Program by extending loans over a longer period of time and give businesses more freedom in how they spend their bailout funds.
Specifically, it would allow forgiveness for expenses beyond the eight-week covered period, which does not work for local businesses barred from opening their doors or ones allowed to open with restrictions.
It would also reduce restrictions limiting non-payroll expenses to 25%, allowing them to use up to 40% of bailout funds to go to non-payroll expenses such as mortgage, rent and utilities.
Another provision would remove the restriction that a company rehire employees by the end of this month, which many companies are unable to do because employees are making more on unemployment than they would working.
To mitigate that unintended consequence of that situation, the deadline to rehire employees would be extended under the new law.
Looking ahead to next week, King said Thursday that Senate would likely take up the House version of his bill either as is or with some amendments.
"The PPP has been a very successful program," he said. "It was put together in a hurry, so it's not unexpected that there should be unintended consequences, and that's what we're all trying to address."
He also said he had heard that there is still about $100 billion left to allocate from the second funding round, saying, "We seem to be OK on the money side, at least as of right now. It's just a question of trying to fix some of the provisions t make it more useful to certain businesses for which some of the rules don't work."
King sees the bill moving ahead quickly in the Senate, predicting a resolution within the next 10 days.
"Let's see if Congress can do anything in 10 days," he said. "I'll accept that challenge."
Reaction from one bank exec
Andrew Silsby, president and CEO of Augusta-based Kennebec Savings Bank whose team has been busy processing loans, told Mainebiz he welcomes any flexibility to the loan forgiveness process.
"Small businesses need a simple way to go get these loans forgiven, and the current process is fairly difficult for businesses to be able to navigate," he said.
Calling the Paycheck Protection Program Flexibility Act "a great step forward," Silsby said he is hopeful that lawmakers will be able to come together in a nonpartisan way to help small businesses, many of whom are questioning if they will be able to make if a loan is not forgiven.
"These loans are 100% guaranteed by the SBA, so they are just going to pay it off anyway," he added. "So let's all recognize that and make this forgiveness process easy, and do it soon."
Mainebiz webinar next week
To help businesses learn how they can qualify for loan forgiveness under the PPP, Mainebiz is holding a free one-hour webinar on Thursday, June 4, from 11 a.m. to noon.
Experts will review the latest rules and share case studies, and look at all businesses including those that are seasonal, owned by sole proprietors and that had to adjust their employee numbers.
Full details and registration are available here.
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