NEW ALBANY — The federal Paycheck Protection Program provided bridge loans intended to help businesses get to the other side of the pandemic, but more aid will be needed to avoid the possibility of a deeper recession, U.S. Sen. Todd Young said Wednesday.
Young made a stop at Dress & Dwell in New Albany as part of his tour promoting the RESTART Act, which stands for Reviving the Economy Sustainably Towards a Recovery in Twenty-twenty. The Indiana Republican touted the legislation as a bipartisan effort to improve upon the PPP process while providing for additional loans to businesses that are hurting from lost revenue due to the pandemic.
“Unfortunately when the pandemic hit, it interrupted so many otherwise viable, thriving business operations and people need some help to open our economy and try to get things moving again,” Young said.
A major part of the legislation is extending the eight-week covered period businesses have in determining what amount of PPP loan forgiveness they will receive. Businesses are required to rehire their full staff by June 30 under PPP.
The RESTART Act would extend that period to 16 weeks “to allow the hardest-hit businesses that have seen revenues decline by at least 25 percent additional time to deploy PPP funds and meet the requirements for loan forgiveness,” according to a summary of the legislation provided by Young’s office.
Additionally, the RESTART Act calls for a new loan program that would cover payroll, benefits and fixed operating expenses for up to six months for businesses that have experienced significant revenue hits during the pandemic.
Most businesses — including nonprofits, veterans organizations and self-employed individuals — with fewer than 5,000 employees would be eligible for the loans. Young said the structure of the program is designed to reach the smallest businesses. The legislation specifies more loan forgiveness for businesses with 500 or fewer employees.
If passed into law, borrowers could apply for the loans via local banks, credit unions and community development financial institutions.
The loan would be repaid over seven years with a share of the debt forgiven based on lost revenue for the business in 2020.
Sen. Michael Bennett, D-Colorado, joins Young as a co-sponsor of the RESTART Act.
“This is the first and only bipartisan proposal that supports the hardest-hit businesses by fixing the Paycheck Protection Program and providing relief through the rest of the year,” Bennett stated in a news release.
Amanda Mulvene, owner of Dress & Dwell, said the downtown boutique received a PPP loan during the second round of funding.
“It did give us a little bit more certainty during such an uncertain time. However, I do know, like Sen. Young was talking about, that the time frame of eight weeks, it has not always worked for all businesses as everyone wasn’t able to open up,” she said.
Young emphasized that about half of America’s private sector workforce is employed in small businesses, and that more needs to be done to ensure those employers don’t have to shut their doors.
The recession could take “a downward turn” if scores of small businesses are forced to shutter, Young said.
“I’m not predicting that’s going to happen, but we need to hedge against that possibility,” he said.
Young is optimistic the RESTART Act could be passed in a few weeks, though he added some senators believe it could be late June or July before the legislation receives a vote.
“I personally think we need to act sooner than that,” he said.
A total funding amount hasn’t been tied to the legislation, but Young said the expense would be worth the investment.
“Imagine how much it would cost if we allow millions of businesses to fail,” Young said. “It would not be a pretty picture to say nothing of the social consequences of having one’s Main Street hollowed out.”