U.S. Sen. Susan Collins (R-ME) said she has introduced a bill to help stabilize America’s small businesses during the coronavirus pandemic.
“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,” Sen. Collins said.
The senator added that she has been working with U.S. Treasury Secretary Steven Mnuchin and a group of her U.S. Senate colleagues on the proposal.
“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,” said Sen. Collins.
For example, Sen. Collins pointed to the hospitality industry, which includes restaurants, hotels and B&Bs that she said “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,” she added.
If enacted, the bill also would structure the cash-flow assistance 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 Treasury Secretary, according to a bill summary provided by Sen. Collins’ office.
Additionally, the bill would authorize the amount loaned to be either drawn from a line of credit as needed, or the employer could estimate upfront the amount it needs to cover lost revenue needed to make payroll during the crisis, according to the summary, which noted that if an employer draws more than is needed, the employer could repay the excess without penalty when the crisis passes, or 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 Dec. 30, and loan forgiveness would accrue over the same period, the summary says.