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Collins, King introduce new legislation to help some small seasonal businesses

The 'Seasonal Business PPP Parity Act' is designed to help some small seasonal businesses receive additional PPP funds they may have missed out on in 2020

MAINE, USA — For many small businesses in Maine, the upcoming season will be a time to try to make up some of the money lost last year. Forgivable loans through the federal Paycheck Protection Program have played a big role in helping a number of these businesses stay afloat during an unprecedented time. To further extend that support, Maine's U.S. senators are backing new legislation that would address additional needs.

Last week, Sens. Susan Collins and Angus King introduced the "Seasonal Business PPP Parity Act." According to a joint press release from their offices, if enacted, this legislation would provide more support to some seasonal businesses in Maine and elsewhere that may have missed out on some funds last year. The ultimate goal is to "equalize" treatment among small seasonal businesses.

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The PPP began in April 2020. At that point, loans for businesses were determined based on average monthly payroll between February 15 or March 1, 2019 and June 30, 2019. According to the press release, that timeframe "did not fully capture the busy summer season when the staffing and payroll needs of many of Maine’s seasonal businesses increase dramatically." 

As a result, the window for loan calculation was changed to May 1 through September 15, 2019 about a month later. By then, though, many small businesses had already applied for loans and couldn't backtrack to receive those additional funds.

In the December 2020 COVID-19 relief package, the rule changed, so seasonal businesses that had not yet received loan forgiveness could use the new timeframe to increase loan amounts. According to the press release, the "Seasonal Business PPP Parity Act" builds on the December law by allowing seasonal businesses that had already received loan forgiveness in December to get the increases on their initial PPP loans tacked onto their second-round loans. 

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In a statement, King said the PPP has been a "lifeline" for small businesses, adding, "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."

Collins spoke to NEWS CENTER Maine, saying she hopes this legislation will help small seasonal businesses prepare for the summer season. 

"(This act) will help them qualify for a larger second loan under the PPP program," Collins explained. "We're trying to get more flexibility that reflects the reality of when our seasonal businesses in Maine have their busiest time of year."

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According to the press release, 16,225 small Maine employers have received more than $922 million in forgivable loans since the PPP's reopening earlier this year. In 2020, the PPP gave more 28,000 small Maine businesses $2.3 billion in forgivable loans, helping to sustain the jobs of more than 250,000 Mainers. 

The U.S. Small Business Administration says in order to qualify for a second-round loan, businesses must have received a first-round loan and have used the entire amount; have no more than 300 employees; and show at least a 25 percent loss of revenue in 2020, compared to 2019. 

As of now, the PPP is open until the end of May, or whenever funds run out. 

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