(Bloomberg) -- Lawmakers rolled out new proposals Thursday to help restaurants and other small businesses still dealing with fallout from the coronavirus outbreak, as a federal relief program is set to end on June 30 with leftover funds and Congress weighs another round of stimulus.
Bipartisan and bicameral legislation was introduced to create a $120 billion bailout fund for small food and beverage establishments, as well as a separate proposal to allow any remaining funds from the Paycheck Protection Program to be used for small firms that need the most help.
The bill introductions come as Congress and the White House are expected to negotiate a potential fourth round of stimulus next month for a U.S. economy still battered by the pandemic, with applications for unemployment benefits last week showing only gradual improvement and millions still out of work. Officials have said the next stimulus measure would include additional aid for small businesses that were left out of earlier rounds or are still trying to re-open and recover.
“Many small businesses will continue to struggle in the weeks and months to come,” said Democratic Senator Ben Cardin of Maryland, the top Democrat on the Small Business & Entrepreneurship Committee, in a statement. “Congress must once again act urgently to support our most vulnerable small businesses through this crisis, so our economy can recover as quickly as possible after the pandemic.”
PPP Extension
Cardin and Democratic Senators Chris Coons of Delaware and Jeanne Shaheen of New Hampshire introduced the “Prioritized Paycheck Protection Program (P4) Act” that would extend the June 30 deadline to Dec. 30 or longer to apply for a forgivable PPP loan while creating a new option for a second loan for borrowers with 100 employees or fewer that have lost at least half their revenue due to the pandemic. A companion bill is also being introduced in the House.
The PPP, which offers loans of as much as $10 million that can become grants if the proceeds are spent mostly on payroll, is set to expire June 30. As of June 12, the program still had almost $130 billion in funds remaining. Any unused funds would be sent back to the Treasury unless Congress approves another use. The Democrats’ bill would use existing PPP funding to make additional targeted loans.
The Small Business Administration has already approved more than 4.6 million loans totaling more than $513 billion. But lawmakers and groups representing small businesses say firms need more help or were unable to tap relief funding, especially independent contractors, the self-employed and minority-owned and other disadvantaged businesses.
The next phase of assistance for small business is going to be very targeted, particularly at minority firms that are struggling more than white-owned businesses, Republican Senator Marco Rubio of Florida, chairman of the Small Business Committee, said in a video posted on Twitter on Tuesday.
There was a 41% decline of Black business owners from February to April, and the number of Latinx owners declined by 32% during that time compared with a 17% drop for White owners, according to a study released earlier this month by the National Bureau of Economic Research.
“These disparities can’t stand,” Rubio said. “We have to confront them because what we cannot afford as a nation, especially right now but in general, is an uneven recovery, a recovery that leaves behind people in many cases along the lines of ethnicity and race.”
Revitalization Fund
Meanwhile, Republican Senator Roger Wicker of Mississippi and Democratic Representative Earl Blumenaur of Oregon released a bill with members of the Independent Restaurant Coalition to create a $120 billion “Restaurant Revitalization Fund” in the Treasury Department to provide grants to food service or drinking establishments through Dec. 31.
The trade group for independent U.S. restaurants released a study last week saying a $120 billion industry stabilization fund could generate more than $270 billion in economic activity through savings of as much as $57 billion on government programs for the unemployed, as well as additional sales and payroll taxes, benefits in the supply chain and tourism spending.
The industry, which says it employs 11 million workers directly, has faced millions of job losses during the shutdowns, severe hits to revenue and the likelihood that occupancy restrictions will imperil firms for months more even as the economy reopens.
Treasury Secretary Steve Mnuchin said last week the U.S. needs additional fiscal stimulus even as the economy starts to rebound, and that a fourth round of fiscal stimulus should include help for restaurants and travel, retail and leisure businesses, as well as possibly more cash for American families.
Federal Reserve Chairman Jerome Powell urged Congress on Wednesday not to pull back too quickly on federal relief for households and small businesses from the pandemic.
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