U.S. Reps. French Hill (R-AR) and Chrissy Houlahan (D-PA) introduced legislation in the House last week that seeks to provide some additional relief for small businesses.
The Paycheck Protection Program Revenue Adjustment Calculation to Increase Capital Accessibility Long-term Act, or the PRACTICAL Act, would allow small businesses eligible for the second-draw PPP to calculate their revenue based on a 90-day earning period rather than on a year over year quarterly basis.
“The PPP, created by the CARES Act, has been a necessary tool for struggling small businesses as they’ve weathered the unprecedented COVID-19 pandemic. In fact, more than 14,000 businesses in Arkansas have received $4.6 billion and through the program have helped save more than 375,000 jobs,” Hill said. “I’d like to thank Rep. Houlahan for joining me in introducing this commonsense bill. Small businesses are the lifeblood of Arkansas, and I am honored to be able to advocate for them in Washington, D.C.”
The PPP has helped many struggling businesses; however, some small businesses are currently at a disadvantage with how the program is set up because of how a business must show its year-over-year revenue decrease.
“While we are making great progress in our fight against the pandemic, our small businesses still need help,” Houlahan said. “I sound like a broken record, but our economy will not successfully recover until our small businesses recover. They represent the very backbone of our economy, at both the local and national level. I have spoken with countless small business owners these past few weeks about their difficulty obtaining a second PPP loan because of the current earning criteria.”
Kevin Kuhlman, vice president, federal government relations at the National Federation of Independent Business, explained that many small business revenue cycles do not follow strict quarterly cycles, especially those in the tourism and hospitality industries.
“By adjusting the eligibility calculation to 90 consecutive days, the bill would allow additional small businesses to be eligible for a second PPP loan. The change is welcome news to small businesses,” Kuhlman said.