As RIers Gear Up for Small Business Saturday, Reed Seeks to Provide Small Businesses with Lifeline Legislation to Help Them Stay Afloat
CRANSTON, RI – As Rhode Islanders gear up to support local businesses this Small Business Saturday in a safe, socially distanced manner, U.S. Senator Jack Reed (D-RI) is pressing Congress and the Trump Administration to enact the HEROES Small Business Lifeline Act. This comprehensive legislation, which Senator Reed teamed up to cosponsor with U.S. Senator Ben Cardin (D-MD), would help direct over $370 billion in federal aid to the hardest-hit small businesses in Rhode Island and nationwide, including minority-owned businesses and very small businesses that have been left behind in this pandemic, as well as restaurants and live venues.
The Reed-backed small business aid package would reauthorize the Paycheck Protection Program (PPP) and provide another round of forgivable federal PPP aid for businesses with fewer than 500 employees. It would also help replenish the Economic Injury Disaster Loan (EIDL) grant program and eliminate the U.S. Small Business Administration’s (SBA) arbitrary caps on EIDL loans to ensure that eligible small businesses receive increased disaster loan funding.
“Small businesses are struggling and it is absolutely critical that the federal government step up with targeted small business assistance that helps save jobs, neighborhoods, and communities. This is a truly national crisis that can only be addressed with a coordinated federal response. This bill would inject much needed capital into the system to help local businesses keep their doors open during the pandemic and ensure workers can earn a paycheck,” said Senator Reed. “Small businesses are facing unprecedented challenges in this pandemic through no fault of their own. This bill offers a literal lifeline for small business and Congress must pass it without further delay. It’s not enough to just ask people to shop local, Senate Republican leaders have to end their blockade on federal assistance to small businesses.”
The HEROES Small Business Lifeline Act would:
Extend and improve the Paycheck Protection Program (PPP) to better serve small businesses: Extends PPP through March 2021; provides a second PPP for the hardest-hit small businesses and nonprofits; expands eligibility to ensure that all nonprofits, regardless of size and type, critical access hospitals, and local news media can participate; simplifies the forgiveness process; repeals the requirement of deducting an EIDL advance from the PPP forgiveness amount; and removes limitations that unfairly restrict small businesses owned by formerly incarcerated individuals from securing a PPP loan. The Reed-backed proposal would allow eligible small businesses to receive federal aid worth up to 250 percent of monthly payroll costs up to a maximum of $2 million.
Extend and expand the Debt Relief program: Extends payments of principal, interest, and fees on all preexisting and new Small Business Administration (SBA) 7(a), 504 and microloans for up to a year, with more relief targeted to existing borrowers in underserved markets and the hardest-hit sectors. This debt relief program is also expanded to include SBA’s physical and EIDL disaster loans.
Support the smallest, most vulnerable businesses: Enacts a new $40 billion Lifeline Grant program, of which half is set aside for underserved businesses, that provides grants of up to $50,000 to vulnerable small businesses that have suffered a significant economic loss and creates a new $15 billion grant program for state and local governments to provide funds to vulnerable small businesses in their communities.
Deliver targeted assistance to small businesses in struggling industries: Includes the Save our Stages (SOS) Act and the RESTAURANTS Act, both of which Senator Reed has cosponsored, to provide dedicated assistance for industries that rely on large gatherings, including restaurants, concert venues, and theaters.
Invest in underserved communities: Invests in the mission- and community-based lenders that have a demonstrated history of getting capital to minorities, women, and other underserved communities. Specifically, it includes a dedicated $15 billion PPP set-aside for Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), and other mission lenders, $1 billion in support for CDFIs, and $13 billion for a new Neighborhood Capital Investment Program to support CDFIs and MDIs, among other key policies to support the work of these lenders in underserved communities.
Improve existing small business initiatives: Builds on SBA’s core programs, including 7(a), Community Advantage, 504, and the Microloan program, by making them more affordable and useful to small businesses, and provides $1 billion for investment capital to underserved businesses. It also strengthens the accountability and transparency of SBA’s EIDL program and makes other commonsense improvements like removing the Trump Administration’s arbitrary $150,000 cap on EIDL loans.
Help minority-owned businesses respond to COVID-19: Provides emergency grants to minority business enterprises through the Minority Business Development Agency (MBDA). The legislation also formally and permanently establishes MBDA and gives it the tools to carry out its mission to help minority entrepreneurs start and grow businesses.