November 19, 2020
WASHINGTON, D.C. – Today, U.S. Senators Angus King (I-Maine) and Steve Daines (R-Mont.) announced that they will be introducing legislation to fix a provision in the CARES Act that could cost small business owners who received both an Economic Injury Disaster Loan (EIDL) Advance and a Paycheck Protection Program (PPP) loan up to $10,000 in loan forgiveness. U.S. Senator Jon Tester (D-Mont.) will cosponsor the bill. King and Daines’s bipartisan legislation would modify the CARES Act to ensure that all EIDL advances would be excluded when determining loan forgiveness; as a result, no business owner who received EIDL Advance funds would have their loan forgiveness reduced for that reason.
“As economic conditions remain uncertain and the virus continues to spread in communities nationwide, small businesses around the country are facing monumental challenges,” said Senator King. “These small businesses are already working overtime to keep operating during this pandemic – and when they applied for vital funding under the CARES Act, they were under the impression that all of their loans could be forgiven. However, a drafting error could pose a costly, unforeseen hurdle to them that could add as much as $10,000 to their expenses. Small businesses certainly do not deserve to have the rug pulled out from under them one more time this year, which is why I will be introducing a bill to ensure that they’ll get to keep these critical funds to sustain their business. With so much uncertainty still ahead for all, this bill would allow small businesses to better weather these tough times and prepare for the future.”
“Montana small businesses and our local community banks have been drastically impacted by the COVID-19 pandemic. They need relief and support right now, not to be worrying about getting stuck with unnecessary loans and payments during these hard times. That’s why we’re introducing bipartisan legislation to ensure small dollar loans are forgiven,” said Senator Daines.
“I applied for the EIDL Advance funds in late March, and after a couple of weeks my company received an EIDL Advance which we used to complete work on a piece of equipment that is part of a water monitoring buoy we are developing to assist local aquaculture farmers and research programs,” said Sean Tarpey, President, Rumery’s Boat Yard in Biddeford. “That advance plus a PPP loan made it possible for us to keep our crew on the payroll while everyone remained at home for 6 weeks until it was safe to return to work. We would have been hard pressed to keep our crew together without the assistance of these two programs. If we ultimately have to repay the EIDL Advance it will be a burden than has not been anticipated. I appreciate the concern and efforts of the Senator and his staff in helping us through the public health emergency this far.”
“I own a sole-proprietor barber shop in Augusta, Maine: 24 years of self-employment, and 19 with my own shop. As a single dad of 2, I am making it by the skin of my teeth; with all the added restrictions I have to do more with less,” said Dana Geneseo, Owner, Dana’s Barber Shop in Augusta. “I take on my long time customers’ pain and frustration from the pandemic every day – like a counselor. I love my people, but I am just as stressed as them as I am being told I’ll have to pay back the EIDL advancement. To take on another payment now could be the final step. A payment I did not expect, that was not supposed to be ‘paid back under any circumstance’. Times are tough, and I am doing my best – working 6 days a week, following all the precautions, but still making less money and paying more bills. Things are looking bleaker by the minute. Thank you Angus King for stepping in for small businesses. I appreciate your work and attention to this matter.”
“This legislation will rectify what was not a transparent or fair application process from the SBA,” said Jon Platt, Co-Owner, Nubble Books in Biddeford. “Small businesses who have closed or are currently struggling deserve better than this.”
Under current CARES Act restrictions, businesses are prohibited from receiving a double benefit – however, many small businesses applied for both the EIDL Advance and Paycheck Protection Program programs under the assumption and guidance that the funds would be forgiven. While current law directs the Small Business Administration (SBA) to subtract the amount that an applicant received as an EIDL Advance Grant from the amount of the business’ PPP forgiveness, today’s bill would allow small businesses to receive full PPP forgiveness in addition to the EIDL grant amount as originally intended.
Today’s legislation is the latest push from Senators King and Daines to make bipartisan improvements to the programs designed to support America’s small businesses during this crisis. In May, they sponsored the Paycheck Protection Flexibility Act, which passed the U.S. Senate unanimously and was signed into law earlier this year. The bill made vital changes to the PPP to better support small businesses, including extending new loans over a longer period of time and allowing for added flexibility in how businesses can spend their PPP funds. The legislation was supported by the Maine Chamber of Commerce, International Franchise Association, American Hotel and Lodging Association, National Federation of Independent Business, National Restaurant Association, US Travel Association, Small Business Majority, U.S. Hispanic Chamber of Commerce, National Small Business Association, National Association for the Self-Employed, Small Business and Entrepreneurship Council, and Economic Innovation Group.