Heads up, small businesses. Here's legislation to watch.
Recently, Senate Democrats proposed legislation that would expand the Paycheck Protection Program Act. The Prioritized Paycheck Protection Program Act (hereinafter, "P4") would authorize another round of funding for companies: (1) with fewer than 100 workers, (2) that saw revenue drop by at least 50% due to the pandemic, and (3) that expect to exhaust their initial PPP loans. [FN 1]
According to the National Law Review, as of June 12, 2020, "[t]here remains about $130 billion in the PPP tank, which expires on June 30, 2020. Generally, this P4 legislative proposal would (1) take those unused PPP funds and extend a new outside date for making loans, i.e., “P4 Loans”, to October 1, 2020 (with some provision for slippage), and (2) prioritize those unused PPP proceeds for the smallest of small businesses, including those in the hotel and restaurant sector. It would do so principally by reserving the lesser of $25 billion or 20% of PPP funds for employers with 10 or fewer employees and also ensure that underserved and rural borrowers, including veterans, are prioritized in loan processing and disbursement." [FN 2]
The purpose of P4 is to "ensure the hardest-hit businesses can access P4 loans, publicly-traded companies would be prohibited, and loans to hospitality and lodging businesses with multiple locations would be capped at $2 million." In her statement, Sen. Jeanne Shaheen of New Hampshire said, that “[t]his legislation prioritizes smaller businesses, particularly those in the restaurant and hospitality industries, that have been hit especially hard in recent months. Every effort must be made to make sure federal relief reaches small businesses that need help the most, and this legislation is a vital next step towards that goal.” [FN 3]
As counsel for startups and small businesses, we are carefully watching this development. Smith Shapourian Mignano PC is available to answer any questions or concerns you may have regarding P4.
This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.
1. See https://www.law360.com/articles/1281648/senate-dems-want-2nd-round-of-ppp-loans-for-small-biz
2. See https://www.natlawreview.com/article/paycheck-protection-program-developments-you-should-know
3. See https://www.pymnts.com/loans/2020/senators-look-to-extend-ppp-loans-include-more-smbs/