Representative Angie Craig Introduces Bipartisan Legislation to Enhance PPP Flexibility for Small Businesses

WASHINGTON, DC – U.S. Representatives Angie Craig (D-MN) and Troy Balderson (R-OH) introduced the PPP Second Draw Fairness Act to establish a more flexible set of eligibility parameters around the second draw of Paycheck Protection Program funds. This bipartisan legislation would ensure that the hardest hit small businesses are able to access a second round of PPP payments by measuring a reduction in revenue over any consecutive 90-day period in 2020, rather than examinations structured strictly on quarterly profits.

"Small businesses are the backbone of our economy, employing millions of Americans and keeping communities across the nation flourishing and vibrant," said Representative Craig. "But over the past year, these businesses have faced hurdle after hurdle as they've weathered the impact of the COVID-19 pandemic. While we can finally see the light at the end of the tunnel, the economic challenges of this crisis are far from over – especially for our Main Street businesses. Today, I'm proud to join Rep. Balderson in introducing bipartisan legislation to ensure that small businesses in Minnesota and across the country have access to the resources necessary to keep their doors open as we continue to emerge from this difficult chapter."

"It is unfortunate that the SBA is unable to offer flexibility for American small business owners," said Representative Balderson. "Our bill sets the record straight and levels the playing field for small businesses to apply for the second draw of PPP funds."

As part of the Consolidated Appropriations Act of 2021 (H.R. 133), Congress passed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act in December 2020. This legislation added additional funds to the SBA Paycheck Protection Program, while also granting qualifying small businesses the opportunity to apply for a second draw of PPP funds. To qualify for a second draw loan businesses must have experienced at least a 25 percent reduction of gross receipts between corresponding calendar quarters in 2020 when compared to 2019.

Due to government-mandated COVID-19 shutdowns being imposed in the middle of the second quarter – most economic losses spanned the second and third quarters, preventing some businesses from accessing funds. The PPP Second Draw Fairness Act would expand the PPP second draw eligibility requirements for small businesses by allowing businesses to prove a reduction of gross receipts of at least 25 percent between any consecutive 90-day period in 2020 when compared to the same period in 2019. Currently, businesses are only eligible if they can prove that revenue loss between corresponding calendar quarters which has excluded small businesses in need of assistance.

Representatives Craig and Balderson previously worked together to introduce the PPP Extension Act (H.R. 7437) which extended the widely popular Paycheck Protection Program after the program's authorization lapsed in the middle of last summer. That legislation was signed into law on July 4, 2020.