WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) led a group of eight Senators in writing to U.S. Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza, urging them to readjust regulatory requirements so that seasonal employers can access the full amount of the PPP loans for which they qualify. The Senators asked the Treasury Department and the SBA to immediately issue a new rule so that seasonal small businesses across the nation can access full PPP funding before the SBA’s guaranty authority expires on June 30th.

“Seasonal businesses need your help,” wrote the Senators. “An Interim Final Rule that Treasury released on April 28 allowed seasonal businesses to calculate their Paycheck Protection Program (“PPP”) loans based on summer season payroll data.  The Rule, however, effectively did not enable the many seasonal businesses that already had received PPP loans based on off-season data to increase the size of their loans.  We urge you to issue a new Interim Final Rule immediately that enables seasonal businesses to access the larger PPP loans for which they qualify.”

“Seasonal businesses in our states need you to act now so that they can access full PPP funding before the SBA’s guaranty authority expires on June 30.  We urge you to issue an Interim Final Rule that includes two improvements.  First, we ask that the Rule allow lenders to seek and receive approval for seasonal business PPP loan increases pursuant to the April 28 Rule.  Second, we urge you to include in the Rule a process by which lenders can submit new or revised Forms 1502 to ensure proper reporting on disbursements of seasonal business PPP loan increases.  We appreciate your efforts to assist our seasonal businesses during this difficult summer, and thank you for your consideration of this important request on their behalf.”

Senator King has pushed to make sure federal funds are being directed to the sectors of our society that need them most as quickly and efficiently as possible – earlier this month, his legislation extending the length of time businesses could use funds and allowing businesses to use more of their loans on non-payroll expenses passed the Senate unanimously and was signed into law. In addition to his leadership in reforming the PPP’s timeline and providing increased flexibility for business owners, Senator King has pushed to ease paperwork requirements for small businesses seeking loan forgiveness under the Paycheck Protection Program. He has also urged the SBA to provide clear, concise, and accurate guidance on eligibility for Economic Injury Disaster Loans. He has cosponsored legislation that would repeal a massive tax break for a small group of wealthy taxpayers that was included in the CARES Act. Since the coronavirus crisis began, he has remained in regular contact with Maine business leaders, including tele-conferences with the Maine State Chamber of Commerce, Portland Buy Local, Penobscot Bay Regional Chamber of Commerce, New England Council, and 500 Maine employees of Sun Life.

The full letter can be read below or downloaded HERE. 

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Dear Secretary Mnuchin and Administrator Carranza:

Seasonal businesses need your help.  An Interim Final Rule that Treasury released on April 28 allowed seasonal businesses to calculate their Paycheck Protection Program (“PPP”) loans based on summer season payroll data.  The Rule, however, effectively did not enable the many seasonal businesses that already had received PPP loans based on off-season data to increase the size of their loans.  We urge you to issue a new Interim Final Rule immediately that enables seasonal businesses to access the larger PPP loans for which they qualify.

On April 28, Treasury exercised its authority to, in its own words, “address the needs of certain potential borrowers that are seasonal employers.”  As you know, the vast majority of seasonal businesses lay dormant for a portion of the year, and then dramatically increase their payroll during their high seasons.  For many seasonal businesses in our states, the high season roughly corresponds with the summer months.  That is why we were particularly pleased with Treasury’s April 28 decision to enable seasonal businesses to calculate their PPP loans based on payroll data from any consecutive 12-week period between May 1, 2019 and September 15, 2019.  For many businesses, PPP loans based on 12 weeks of high season payroll would provide the help necessary to survive the precipitous decreases in summer revenue that they currently are observing.

The April 28 Rule, however, came too late for many seasonal businesses to calculate and receive PPP loans that reflected their high season payroll.  Concerned that PPP funding would be exhausted quickly, a large number of seasonal businesses applied for and received the loans soon after they became available on April 3.  SBA promulgated guidance on a lender reporting process for PPP loans on May 21, requiring that lenders report on these fully disbursed PPP loans by May 29.  SBA only allowed seasonal businesses to increase their PPP loan amounts if their lender had not yet submitted the reporting form (SBA Form 1502) – creating a deadline that was neither certain nor well-publicized.  As a result, many seasonal businesses have been unable to increase their PPP loan size and access the capital necessary for them to survive.

Seasonal businesses in our states need you to act now so that they can access full PPP funding before the SBA’s guaranty authority expires on June 30.  We urge you to issue an Interim Final Rule that includes two improvements.  First, we ask that the Rule allow lenders to seek and receive approval for seasonal business PPP loan increases pursuant to the April 28 Rule.  Second, we urge you to include in the Rule a process by which lenders can submit new or revised Forms 1502 to ensure proper reporting on disbursements of seasonal business PPP loan increases.  We appreciate your efforts to assist our seasonal businesses during this difficult summer, and thank you for your consideration of this important request on their behalf.