A Conversation with Sen. Collins on Small Business and the CARES Act

Date: March 27, 2020

NFIB’s recent conference call for Maine members offered more detail

U.S. Senator Susan Collins was a leader in creating the PPP forgivable loans. She joined NFIB members for a call last week to share more about the discussions that took place when crafting the loans and also answered questions from NFIB members.

As Senator Collins shared it was important to “keep the connection between employers and employees,” when drafting the legislation.

Here is a brief overview of some of the NFIB member questions that Senator Collins was able to offer additional insight on:

  • Can independent contractors apply for PPP forgivable loans?
    • April 3 small businesses and sole proprietors can begin applying.
    • April 10 independent contractors and self-employed people can begin applying.
  • How does PPP impact the fishing industry?
    • Senator Collins worked with her colleague from Alaska to secure $300 million to aid the fishing industry. These funds are going to the Department of Commerce and the National Oceanic and Atmospheric Administration (NOAA). A portion of the money will be used for direct assistance to fishermen and lobstermen. Program details have not been specified, but Senator Collins is regularly in touch with both agencies.
  • Will the paid leave requirements be expanded or extended?
    • Senator Collins noted the balance of taking care of those in need, but also noted the businesses she heard from with cash flow issues at this time. She co-sponsored an amendment providing tax incentives for small businesses that provide a certain amount of paid leave. IRS will be issuing guidance for providing the credits. They have started putting out the forms.
  • Are seasonal employers eligible for PPP forgivable loans?
    • Yes, see NFIB’s side-by-side chart to how a small business should calculate the average monthly payroll to determine eligibility for Paycheck Protection Program loans as compared to the Emergency Injury Disaster loans which are not forgivable.
  • Can a small business apply for a PPP forgivable loan for one purpose and a SBA economic injury disaster loan for another purpose?
    • Yes, as long as the loans are used for different purposes and not the same purpose. For example, the PPP and SBA Economic Injury Disaster loans cannot be used to pya the same expenses. As long as the PPP forgivable loan is used for eight-week payroll and other allowable expenses up to the limit, that will be forgivable. Most other loan programs are loans with lower interest rates, but the business is required to pay them back.
  • Concern related to increased unemployment insurance payments? $600 increase on top of state unemployment insurance compensation. Comments?
    • The intent of the program is to make workers whole and not provide more money receiving unemployment than they would have received working. The Secretary of the Treasury pushed for a $600 flat federal plus up on top of the state’s unemployment even though in some cases, that could cause the individual to receive more. This would not be the case most of the time, but it did cause a lot of alarm. We do not want to create disincentives for the employees to come back to work. What we are checking on right now is whether the standard requirement, when you apply for unemployment insurance, the question is asked, ‘have you been offered a job in the previous week.’ Many cases where the employer has offered for employees to come back to work.

Resources:

Working with Senator Collins and others, NFIB continues to advocate on your behalf. Thank you for sharing your stories and questions. Your voice is vital in helping lawmakers understand the economic impact and in their decision making related to COVID-19.


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