The red flags raised by Democrats as well as business groups dissatisfied with Republicans’ proposed restrictions on small business aid make it likely that the legislation will see significant changes before a final deal is reached.
Yet when it comes to some of the broad strokes in the small business plan, Republicans and Democrats appear to be close to agreement.
Senate Small Business Chair Marco Rubio (R-Fla.), who drafted the Republican proposal, and Sen. Ben Cardin (D-Md.), the panel’s top Democrat, are aligned in the belief that Congress should allow businesses to apply for a second round of forgivable Paycheck Protection Program loans in the coming months. They both want to aim more aid at the hardest hit small employers, including minority-owned businesses.
Cardin and other committee Democrats first proposed letting businesses apply for second loans last month. Rubio’s new bill includes a similar plan. Both would require businesses to show a 50 percent revenue loss to qualify but some details are different. Rubio’s bill would limit the eligibility to businesses with 300 employees or fewer whereas Cardin’s bill would focus on businesses with no more than 100 employees.
“There’s a lot of similarities,” Cardin said in a Yahoo Finance interview Tuesday. “We all want to do more for those businesses that really need it.”
One of the biggest omissions in the eyes of Democrats is the lack of new funding for the Small Business Administration’s Economic Injury Disaster Loan program.
Unlike the Paycheck Protection Program, which delivers loans via banks, the disaster aid program is administered directly by the SBA. Rosen and Sen. John Cornyn (R-Texas) have proposed another $180 billion for the disaster program’s loans and grants as well restrictions on the SBA’s ability to limit how much aid businesses can receive, after the agency infuriated both business owners and lawmakers by imposing its own caps. House Democrats included $10 billion in additional funding for EIDL grants in the $3 trillion economic relief bill they passed in May.
“We need to continue funding the EIDL and EIDL Advance programs in this fourth Covid relief package, so that our small businesses have the necessary relief to stay afloat and weather this prolonged economic storm,” Rosen said. “Real bipartisan solutions are possible, and Senator Cornyn and I provided one. As negotiations continue, I will continue to push for this bipartisan bill to be included in the Senate’s Covid relief package.”
While Rubio has proposed targeting the next wave of small business support at minority-owned businesses and setting aside funding for community-focused lenders, Democrats will likely push for more — a priority that Biden’s presidential campaign highlighted Tuesday in a new economic plan focused on racial equity.
Biden’s campaign said the sweeping proposal would “leverage more than $150 billion in new capital and opportunities for small businesses that have been structurally excluded for generations.” The former vice president called for funding lending programs in Black and Brown communities, support for Community Development Financial Institutions and Minority Depository Institutions as well as plans to attract “public-private venture capital” to entrepreneurs of color.
Biden’s campaign said he would reserve half of future small business relief, whether under the Paycheck Protection Program or other efforts, for businesses with 50 employees or fewer.