Washington, D.C.—U.S. Senator Susan Collins, a senior member of the Appropriations Committee and a member of the Health Committee, unveiled a legislative proposal today that would help prevent Americans from losing their jobs and keep small businesses from going under as a consequence of the coronavirus pandemic.
“I have been working with Secretary Steven Mnuchin and a group of my Senate colleagues, including Small Business Committee Chairman Marco Rubio, on legislation to address an issue facing small businesses in Maine and throughout the nation,” said Senator Collins. “Our plan will address the cash flow problem that small businesses are facing through no fault of their own by providing guaranteed federal loans to be used to pay their workers. An example is the hospitality industry in my state, where we have numerous restaurants, hotels, and B&Bs, that are being affected already due to the cancellation of graduations, conferences, and other events. As long as the business does not lay off any of its employees, the loan would be forgiven when it matures.”
“The purpose of this bill is to help workers keep their jobs and make sure that businesses that were thriving prior to the recent outbreak will be able to remain open once the crisis has passed,” Senator Collins continued.
Specifically, Senator Collins’ bill would:
· Provide cash-flow assistance quickly to employers who agree not to lay-off their workers. This cash-flow assistance could be as much as the employer needs to stay in operation without lay-offs. The cash-flow assistance must be used to pay employees.
· When the crisis passes, the cash-flow assistance would be forgiven, so long as the employer keeps their workers employed and paid.
· This cash-flow assistance would be structured as federally-guaranteed loans made available through any lender qualified to make SBA 7(a) or 504 loans, and also FINTECH lenders approved by the Secretary.
· Terms would match those of SBA’s Economic Injury Disaster Loans (EIDL), except that the loans would be fully forgiven if the employer keeps its workers employed through the crisis.
· The amount loaned could either be drawn from a line of credit as needed, or the employer could estimate up front the amount it needs to cover lost revenue needed to make payroll during the crisis.
· If the employer draws more than is needed, the employer could repay the excess without penalty when the crisis is over. Alternatively, and if the employer otherwise qualifies, the excess could be converted to a loan on standard terms.
· Loans would be available for the duration of an “emergency period” beginning on March 1 and ending June 30, unless extended through December 30. Loan forgiveness would accrue over the same period.