Reed Helps Build Momentum for RESTART Act to Assist Main Street Businesses
Bipartisan RESTART Act would create new, more targeted Main Street business relief program to help employers & employees survive COVID-19 pandemic
PROVIDENCE, RI – In an effort to help small and mid-sized businesses struggling with the impacts of the novel coronavirus (COVID-19) pandemic, U.S. Senator Jack Reed (D-RI) is leading a bipartisan push to create an additional Main Street business relief program offering long-term loans and flexible forgiveness.
Recognizing that the short-term forgivable bridge loans offered by the federal Paycheck Protection Program (PPP) may not work for many businesses, Senator Reed joined a bipartisan coalition of a dozen leading U.S. Senators cosponsoring the Reviving the Economy Sustainably Towards a Recovery in Twenty-twenty (RESTART) Act (S. 3814). This bipartisan bill would create the RESTART Program, which will provide small- and mid-sized businesses with the working capital they need to get through 2020 and offers favorable, flexible terms and seven years to repay the federal loan. Notably, it targets businesses that have been hit the hardest and seen their revenue fall by twenty-five percent or more.
“The U.S. economy is in tough shape and we’ve got to do more families and Main Street in order to boost overall economic health. The RESTART program picks up where PPP left off and makes up for its limitations because it is more targeted and recognizes that COVID-19 isn’t a short-term problem, but a long-term challenge that requires sustained commitment and resources from the federal government. We have a window of opportunity to stabilize the economy and Congress should quickly pass the bipartisan RESTART Act to help Main Street and prevent another surge of unemployment, defaults, and business closings,” said Senator Reed. “This bill does something very simple, but very profound: it aligns federal COVID-relief policy with the reality businesses are facing. COVID-19 isn’t a short-term problem that can be wished away. We need forward-looking, long-term solutions like the RESTART Act to help safely steer through the downturn and danger of this pandemic.”
The RESTART Act is led by U.S. Senator Michael Bennet (D-CO) and cosponsored by Senators Reed, Todd Young (R-IN), Tim Kaine (D-VA), Roy Blunt (R-MO), Jeff Merkley (D-OR), Kevin Cramer (R-ND), Angus King (I-ME), Joni Ernst (R-IA), Jon Tester (D-MT), Cory Gardner (R-CO), and Thom Tillis (R-NC). Companion legislation was introduced in the U.S House of Representatives this month by Congressman Jared Golden (D-ME) and Congressman Mike Kelly (R-PA).
The RESTART Program would provide businesses with funding to cover six months of payroll, benefits, and fixed operating expenses for businesses that have seen substantial drops in revenue during the COVID-19 pandemic. The program is designed to provide small- and medium-sized businesses with loans to get up and running and stay afloat, and ensures that a share of loans taken out will be forgiven based on revenue losses in 2020, with the remainder being repaid over seven years.
The structure of the loan program is designed to reach the smallest businesses and would cover most nonprofits, veterans’ organizations, self-employed individuals, independent contractors, and Tribal businesses. Those with fewer than 5,000 full-time equivalent employees would be eligible for the program, and businesses with fewer than 500 full-time equivalent employees will receive more generous loan forgiveness in order to make sure relief makes it to the businesses that need it most.
The RESTART Act has earned the endorsement of dozens of national and international trade associations, representing businesses from the hospitality, music, retail, restaurant, non-profit, and manufacturing industries, including: the National Restaurant Association, the National Association of Manufacturers (NAM), National Association of Theatre Owners (NATO), the Recording Academy (the organization behind the GRAMMY Awards), the American Society of Travel Advisors (ASTA), the Equipment Leasing and Finance Association, the National Independent Venue Association, the PLAY Sports Coalition, the Live Events Coalition, the Outdoor Amusement Business Association, the Sports Events and Tourism Association, the Broadway League, the American Sportfishing Association (ASA), the Outdoor Industry Association (OIA), the National Marine Manufacturers Association (NMMA), the Marine Retailers Association of the Americas (MRAA), the International Franchise Association (IFA), and the National Independent Talent Organization (NITO).
SUMMARY: RESTART Act (S. 3814)
The RESTART Act would:
- Create a small business relief program under the U.S. Small Business Administration (SBA);
- Offer partially forgivable loans to small businesses that had a greater than 25 percent drop in their total income compared to the period before the coronavirus pandemic;
- Set a loan term of seven years, with a fixed interest rate between two percent and four percent for the first two years;
- Allow loan forgiveness for a wider range of expenses that PP, including: Payroll costs (which are not forgivable for businesses with more than 500 employees); Mortgage interest, rent, and utility payments; Interest on existing debts; and personal protective equipment (PPE);
- For loan amounts that are not forgiven, principal payments could be deferred for up to four years;
- Allow applicants who went through PPP process to submit a modified PPP application to apply for RESTART;
- Require publicly traded companies to repay the full loan amount; and
- Report on identities and any loan forgiveness amounts of all recipients of the RESTART loans who have 50 or more employees.