- Senate Minority Leader Chuck Schumer proposes HEROES Small Business Lifeline Act, to be incorporated into a larger economic stimulus bill
- Aid would authorize a second round of Paycheck Protection Program funding, focused on small businesses and nonprofits
- Other aspects of the bill include expanding eligibility and setting aside money for very small businesses, underserved communities
Senate Minority Leader Chuck Schumer is proposing a second round of Paycheck Protection Program loans, geared toward smaller companies and nonprofits, as part of a larger economic stimulus bill. Schumer said the revamped program would work to make loans more accessible and benefit the businesses that have been hardest hit by the COVID-19 pandemic.
Dubbed the HEROES Small Business Lifeline Act, a reference to the $2.2 trillion HEROES Act championed by House Democrats to provide a new round of COVID-19 economic relief, the new round of PPP would be available to companies with fewer than 200 employees, including sole proprietors, self-employed workers, and independent contractors. Recipients would be able to apply for up to 250 percent of their monthly payroll costs, to a maximum of $2 million.
The legislation would extend the PPP loan period into 2021, until the end of March. Schumer is proposing several requirements to concentrate loans on smaller companies, including:
- Setting aside 25 percent of funds, up to $15 billion, to be distributed to businesses in underserved communities through Community Development Financial Institutions, Minority Depository Institutions, micro-lenders, and development companies certified by the U.S. Small Business Administration
- Setting aside 10 percent of available funds for companies with 10 or fewer employers, sole proprietors, independent contractors, and self-employed workers
- Expanding eligibility to include hospitals, local media companies, and nonprofits of all sizes
- Making personal protective equipment expenses and supplier costs forgivable
- Simplifying the PPP loan forgiveness process
- Repealing a requirement deducting an Economic Disaster Recovery Loans advance from the PPP forgiveness amount
Schumer said the HEROES Act would also include targeted relief, such as “Save Our Stages” funding to support performing arts venues. He also voiced his support for having federal aid be extended directly to municipalities, which have been hit by diminished tax revenues, rather than having it distributed through state governments.
Congress has been at a stalemate for months over how large a new economic stimulus package should be and how the money should be spent. Senate Republicans have favored smaller or piecemeal bills, and made unsuccessful attempts to pass a $500 billion relief package and standalone PPP renewal. Democrats are backing the larger HEROES Act, and could push the legislation in the Senate if they win two runoff elections for the Senate set in Georgia for early January.
However, Democrats have been under increasing pressure to agree to a smaller relief bill before President-elect Joe Biden takes office. A story in the New York Times suggests that Biden urged Democratic leaders to accept a smaller package, but a Biden spokesman denied this report and said Biden favors the passage of the HEROES Act.
