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Gardner pitches changes, expanded eligibility to coronavirus small business aid

The Hill
May 6, 2020

By Jordain Carney

Sen. Cory Gardner (R-Colo.) is urging his colleagues to make reforms to a key small business aid program as lawmakers discuss what will be included in their next coronavirus relief package.

Gardner sent a letter Wednesday to his Republican colleagues saying he had discussed the Paycheck Protection Program (PPP) with small businesses and that they had “made clear that the program needs to be modified.” 

“The proposed modifications will expand access to the program and make it more usable for these businesses that desperately need our assistance,” Gardner wrote in the letter, a copy of which was obtained exclusively by The Hill ahead of its release.

Gardner is outlining nine changes to the legislation, including allowing for businesses that already have a loan under PPP to increase their loan amounts if they have “suffered a significant revenue loss.”

Gardner, who is up for reelection in 2020, is also proposing expanding eligibility for the program, including for nonprofits, some of which have said they have not been able to get assistance under the program, and by expanding the list of franchisees who are able to qualify.

The Wall Street Journal reported last month that the Small Business Administration (SBA) told franchises that to qualify for PPP they had to be included in a directory it uses to determine loan eligibility outside of the coronavirus pandemic.

“I have heard from multiple Colorado franchisees that are in desperate need of relief but are not eligible because they are not on the right franchise list. We should expand the list of eligible franchisees to include these small businesses,” Gardner wrote. 

Gardner, who is one of only two Republican senators up for reelection in a state that President Trump lost in 2016, is also proposing additional flexibility under the program including what percentage of a PPP loan businesses have to spend on payroll versus rent, and more flexibility for agricultural producers.  

He also wants to specifically prohibit banks from “intentionally discriminating” against borrowers depending on if the business already has credit with that bank, and to specifically set aside money for the “smallest businesses” including minority- and women-owned businesses. 

One of the most high-profile snags of the initial rollout of the program was pushback from businesses and independent contractors that said they were struggling to get a loan because they did not already have a relationship with a bank. 

The $484 billion “interim” bill also specifically set aside approximately $60 billion for smaller banks over concerns that they struggled to tap into the initial $349 billion allocated in March for the program.  

“These ideas reflect the necessary modifications to the PPP to more effectively work for people across the country. We should waste no time in adopting them. I know we share the common goals of helping thousands of small businesses across America stay afloat and retain as many workers as they can,” Gardner wrote in his letter.

Gardner’s letter comes as Senate Majority Leader Mitch McConnell (R-Ky.) and other GOP senators say they are hitting “pause” on additional coronavirus legislation as they try to determine what worked and what did not work in the nearly $2.8 trillion that Congress has already appropriated to combat the coronavirus. 

Several senators have pitched changes to the PPP, including bolstering the requirement that businesses show that they need the loan due to economic hardship from the coronavirus. 

Sen. Ron Johnson (R-Wis.), in a Wall Street Journal op-ed, argued that the loans haven’t “been limited to those who truly need them.” He’s pitching limiting loan forgiveness under the program, including not allowing the loan to be forgiven if a business’s taxable 2020 income exceeds its 2019 income. 

Sen. Rick Scott (R-Fla.), meanwhile, has proposed upping the financial hardship businesses have to show to qualify for the loans and also prohibiting banks from adding additional requirements — something that was reportedly happening during the early rollout of the program.

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