Dean Phillips has introduced two important reforms impacting the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) programs, the emergency sources of funding for small businesses struggling in the wake of the coronavirus epidemic. This legislation will make billions of dollars more accessible to small businesses without close relationships with big banks and to the small businesses that comprise the industries most impacted by the economic downturn, especially restaurants, music venues and other members of the hospitality industry.

The bipartisan PPP Flexibility Act, which reflects the needs of vulnerable small businesses on Main Street, will increase flexibility and access to PPP loans by:

• allowing forgiveness for expenses beyond the 8-week covered period to 24 weeks and extending the rehiring deadline;
• increasing the current limitation on nonpayroll expenses (such as rent, utility payments and mortgage interest) for loan forgiveness from 25 to 40 percent;
• extending the program from June 30 to December 31;
• extending loan terms from two to five years; and
• ensuring full access to payroll tax deferment for businesses that take PPP loans.

The bipartisan TRUTH ACT will improve transparency in SBA lending: requiring the SBA to identify borrowers with loans above $2 million and explain the decision-making process, including for both PPP and EIDL loans above this amount, so that funds go to the small businesses most in need.  The bill also requires disclosure of assistance to socially and economically disadvantaged small business owners and women- and veteran-owned businesses.

We cannot accept a situation in which bigger businesses with access to other sources of liquidity are pushing to the front of the line to get loans, at the expense of those with the greatest need, particularly the minority, women and veteran-owned businesses that are struggling the most during the pandemic.