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After PPP, are Small Businesses Ready for P4?


Certain small-business owners may be able to apply for a second Paycheck Protection Program loan if a new bill introduced on June 18 becomes law.

The legislation, called the Prioritized Paycheck Protection Program (P4) Act, would allow businesses with fewer than 100 employees to apply for a second loan if they have used up (or are on pace to exhaust) their first PPP loan and can show a 50% loss in revenue due to the COVID-19 pandemic. Business owners also must show they need the money for payroll and eligible non-payroll costs. 

The Small Business Committee Ranking Member Cardin, Sen. Chris Coons (D-DE) and Sen. Jeanne Shaheen introduced the Senate version of the bill. Rep. Angie Craig (D-MN) and Rep. Antonio Delgado (D-NY) introduced the same bill in the House.

The senators argue some small businesses are still struggling because the shutdown has lasted longer than originally anticipated when Congress put together the program.

Treasury Secretary Steve Mnuchin said “We absolutely believe small business — and, by the way, many big businesses in certain industries — are absolutely going to need more help.”

The bill is aimed to make sure the businesses struggling most get P4 loans, publicly traded companies are not eligible and hospitality and lodging businesses with multiple locations are limited to an aggregate limit of $2 million of loans. The bill would set aside the lesser of $25 billion or 20% of PPP funds for employers with fewer than ten employees and businesses in underserved and rural communities. The bill also directs SBA to issue guidance to give priority to the smallest businesses. The P4 loans would be eligible for forgiveness 8 weeks after the loan has been disbursed.

“Many small businesses will continue to struggle in the weeks and months to come,” Ranking Member Ben Cardin said. “Congress must once again act urgently to support our most vulnerable small businesses through this crisis, so our economy can recover as quickly as possible after the pandemic. Every business we prevent from failing now, is a business that will be in a position to create jobs during the recovery.”

“Even as our economy begins to recover, small businesses have a long way to go before they’re back on their feet,” said Jeanne Shaheen. “A second installment of PPP funding is the lifeline many businesses need to get them to the other side of this crisis while keeping employees on payroll. This 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.”

The CironeFriedberg Team will be monitoring this bill and will send out an e-blast if and when this bill passes, and as always, we will be here to help you through the application and forgiveness process.



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