WASHINGTON—Senate Republicans this week began rolling out components of their proposed Phase 4 relief package called the HEALS Act (Health; Economic Assistance; Liability Protection; and Schools Act). The HEALS Act includes additional assistance for small businesses through the SBA’s Paycheck Protection Program (and 7(a) program, worker and business protections and funding for schools to reopen, as well as another round of economic impact payments to consumers among other steps.
An early version of the bill would reduce to $200 from $600 the extra funds that have been provided to the unemployed as part of the CARES Act. The GOP relief package would cost approximately $1 trillion; the House has already passed a $3 trillion relief package of its own, the HEROES Act.
The core of the new GOP package was initially released as a series of separate bills.
Small Biz Recovery Program
The small business assistance portion, the Continuing Small Business Recovery and Paycheck Protection Program Act would:
- Authorize $100 billion in long-term, low-cost 7(a) loans to recovery sector businesses, including seasonal businesses and businesses located in low-income census tracts that meet certain criteria
- Allow small businesses with fewer than 300 employees that have seen at least a 50% reduction in gross revenues to apply for another PPP loan, though the total PPP loan amount cannot exceed $10 million
- Set aside $25 billion of PPP funds for entities with 10 or fewer employees
- Set aside $10 billion of loans to be made by community lenders
- Create the Small Business Growth and Domestic Production Investment Facility, which would provide $10 billion in long-term debt with equity features to registered SBA Small Business Investment Companies that invest in small businesses with significant revenue losses related to the coronavirus pandemic, manufacturing startups in the domestic supply chain, and small businesses within low-income communities
Additional PPP Components
In addition, the bill would make several improvements to the PPP, including:
- Expanding forgivable expenses to include covered supplier costs, covered worker protection expenditures, and covered operations expenditures
- Allowing borrowers to select a preferred eight-week period through 2020 to use the forgivable loan proceeds
- Simplifying the forgiveness application process for smaller loans
- Expanding PPP eligibility to include certain 501(c)(6) organizations
- Establishing a specific PPP loan calculation for farmers and ranchers and provides Farm Credit System Institutions with greater certainty and equity in participating in PPP lending
SAFE TO WORK Act
The Safeguarding America's Frontline Employees to Offer Work Opportunities Required to Kickstart the Economy (SAFE TO WORK) Act would:
- Help essential businesses that have remained open to stay open, and help other businesses to reopen safely by providing liability protections from lawsuits related to the pandemic
- Assist schools, colleges, and universities with reopening in the fall
- Encourage and protect workers who return to their jobs by rewarding compliance with coronavirus-related public health guidelines
- Ensure that bad-faith actors are held accountable for coronavirus-related related injuries
With the release of the Senate Republican proposal, congressional leaders are now working to get a bipartisan agreement on a relief package that can pass both chambers before the August recess, NAFCU said.
CUNA Responds
“Ensuring that small businesses can remain focused on serving their communities, customers, and employees amid this pandemic has been a tent pole of the Paycheck Protection Program since its creation,” said CUNA President and CEO Jim Nussle. “Unfortunately, the program’s history has also shown the need for Congress to be more prescriptive in its guidance to ensure that those businesses, and the credit unions facilitating their loans, experience a rapid and streamlined process.
“As Congress continues to negotiate the next phase of this crucial program, we encourage the adoption of the bipartisan legislation introduced by Sens. Cramer, Menendez, Sinema, and Tillis, and Reps. Houlahan and Upton,” continued Nussle. “In this critical hour, it’s imperative that America’s small businesses focus on keeping Main Street resilient rather than jumping through regulatory hurdles.”