WASHINGTON, D.C. – U.S. Senators Angus King (I-Maine) and Susan Collins (R-Maine) have introduced the Seasonal Business PPP Parity Act, legislation that would provide additional support for those seasonal small businesses who were unable to utilize further relief provided by the December 2020 law because their PPP loans had already been forgiven. The legislation modifies a provision in the Paycheck Protection Program to provide additional funds to some seasonal businesses who applied in the early days of the PPP, helping to equalize their treatment with that of other seasonal small businesses.

“The Paycheck Protection Program has been a lifeline for so many small businesses in Maine and across the country,” said Senator King. “Since the PPP was created last spring, Congress and the SBA have continually improved the program to meet the specialized needs of businesses, including those of the seasonal businesses that fuel Maine’s vibrant economy. I remain committed to supporting the PPP’s important role in sustaining our businesses through this unprecedented pandemic. This bill will ensure that struggling seasonal businesses receive every PPP dollar that they are qualified for, and help them continue to play a vital role in local communities for many years to come.”

“As a co-author of the PPP, I am pleased that this program has helped tens of thousands of Maine small businesses keep their doors open and supported the jobs of hundreds of thousands of Mainers,” said Senator Collins.  “Last year, I successfully pressed Treasury to ensure that Maine’s seasonal employers, who have been particularly hard-hit by the COVID-19 pandemic, received more flexibility in calculating their maximum PPP loan size.  I also secured a provision in the December 2020 COVID package to extend this relief to many small businesses that applied for the PPP before the new rule took effect.  This new bill will provide this same treatment to small businesses whose first draw loans had already been forgiven, which will provide welcome relief as they prepare for the busy summer season.”

As the coronavirus pandemic created massive uncertainty for businesses across the nation, many seasonal businesses applied for and received PPP loans as soon as the program opened in April 2020. Under the program’s original rules, seasonal businesses had to calculate their loan based on their average monthly payroll for the period beginning February 15, 2019, or March 1, 2019, at the election of the borrower, and ending June 30, 2019; however, these windows did not fully capture the busy summer season when the staffing and payroll needs of many of Maine’s seasonal businesses increase dramatically.   

Following an effort led by Senator Collins, in late April, the Treasury released an Interim Final Rule (IFR) allowing seasonal businesses to calculate their loans based on the average monthly payroll in a consecutive 12-week period between May 1, 2019, and September 15, 2019, and on May 19, the SBA released an IFR that allowed seasonal businesses to increase their first-draw loans if using the seasonal method resulted in a higher loan amount and if the lender had not yet submitted paperwork to the SBA on the loan. However, many small businesses, anxious to take advantage of federal aid, had already submitted their applications and their lender had already submitted their paperwork to the SBA; as a result, these businesses were not eligible to receive this additional support.

Senator Collins secured a provision in the December 2020 COVID package to allow seasonal businesses who had not yet received forgiveness to use the newer seasonal calculation to increase their loan amounts. The Seasonal Business PPP Parity Act builds on the December law by allowing seasonal businesses who had already received forgiveness when the December was enacted to obtain their increases on initial PPP loans as increases to their second-draw loans. 

Senator King has continued to seek opportunities to strengthen federal support for struggling small businesses throughout this crisis. In June 2020, he led a letter urging the Treasury Department to adjust PPP requirements in order to support seasonal small businesses across the nation. In May, Senators King and Steve Daines (R-Mont.) sponsored the Paycheck Protection Flexibility Act, which passed the U.S. Senate unanimously and was signed into law. The bill made 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. In November, King and Daines introduced legislation to modify the CARES Act to ensure that all Economic Injury Disaster Loan advances would be excluded when determining loan forgiveness. That legislation became law in December 2020.

Senator Collins co-authored the Paycheck Protection Program, which became law as part of the CARES Act last year.  In 2020 alone, the PPP provided 28,000 Maine small businesses with $2.3 billion in forgivable loans, sustaining the jobs of more than 250,000 Mainers.  As a lead negotiator of the December COVID-19 relief package, Senator Collins secured an additional $284.5 billion to reopen the PPP for first-time applicants and allow the hardest-hit small businesses to receive a second PPP loan.  In March, President Biden signed into law legislation she co-authored to extend the PPP deadline for an additional two months to May 31, 2021, and provide the Small Business Administration with an additional 30 days to process applications.  Since the PPP’s reopening earlier this year, 16,225 Maine small employers have received more than $922 million in forgivable loans, and financial institutions are continuing to accept applications.