Golden introduces 'new PPP' bill with longer-term support for small businesses

U.S. Rep Jared Golden standing at a table where a group of men and women are manufacturing leather goods

Courtesy / U.S. Rep. Jared Golden U.S. Rep. Jared Golden, D-Maine 2nd District, talks to employees at a Greenville business in January. Golden is introducing a bill that would provide long-term financial help to businesses affected by the COVID-19 pandemic.

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By Maureen Milliken

U.S. Rep. Jared Golden, D-Maine 2nd District, plans to introduce a bill in the House of Representatives Thursday that's similar to the one that created the Payroll Protection Program, but provides longer-term support and could make some fixes to it.

The RESTART Act, introduced by Golden and Rep. Mike Kelly, R-Pa., is similar to a bill being introduced in the Senate. It lays out a COVID-19 small business relief program that is designed to respond to a lengthy economic downturn, to learn from the experience of the PPP and to help address the concerns of small businesses with that program, according to an email from Golden's office.

Many of the changes in RESTART are responses to concerns Golden has been hearing about directly from small businesses, a spokesman said.

RESTART loans would run from six months to a year, depending on the business. To qualify, a business would have to demonstrate at least a 25% drop in gross receipts. They'd also have to be PPP-eligible or not have more than 5,000 employees. The loans would be issued by private lenders and guaranteed by the Small Business Administration.

There is also a much wider array of allowable uses than under the PPP — no "75/25" or "60/40" rules — and a share would be forgiven based on the business's decline in gross receipts. Any loan proceed that's not forgiven won't have to be paid back for at least a year, and after that, a business could get up to seven years to repay.

The amount would be capped at 45% of 2019 gross receipts or $12 million, whichever is lower. PPP and EIDL amounts already received are subtracted from the cap. Interest would be 2-4% the first two years, and 2.5-6% through the seventh year.

Applicants that got PPP money would be able to use a modified version of that application to apply, and underserved borrowers and small borrowers would have a dedicated application window.

The bill bans use for stock buybacks or dividends. Among the allowable uses:

Payroll costs, including PPP-allowable costs;
COBRA health insurance continuation costs;
Non-cash fringe benefit costs;
Payments to independent contractors;
Mortgage interest, rent, utilities;
Principal and interest on other existing debts;
Personal protective equipment;
Business expenses such as replenishing inventory, franchise fees, maintenance, taxes, and capital expenses required to comply with social distancing rules.

Payroll costs, rent, utilities, mortgage interest, interest on existing debts and personal protective equipment costs are forgivable uses for recipients with 500 or fewer employees. For larger recipients, salary costs are not forgivable.

Golden was expected to make an official announcement with more details on the legislation later on Thursday.