Democratic Senators Introduces New Bill
(Prioritized Paycheck Protection Program (P4) Act)
to Provide Additional Financing to Businesses

COVID-19 Business Update

A new bill, the Prioritized Paycheck Protection Program (P4) Act, was recently introduced by a group of Democratic Senators. P4 would allow businesses with fewer than 100 employees to apply for a second loan if they have used up (or are on pace to exhaust) their first Paycheck Protection Program (PPP) loan and can show a 50% loss in revenue due to the COVID-19 pandemic. Business owners also must show they need the money for payroll and eligible non-payroll costs.

The bill will focus on giving priority to smaller businesses. Publicly traded companies would not be eligible, and hospitality and lodging businesses with multiple locations would be limited to an aggregate loan amount of $2 million. The bill requests demographic information of P4 and PPP loan recipients.

The bill would extend the June 30 deadline to December 31 or longer for businesses to apply for a forgivable loan under the currently existing PPP legislature, while creating a new option for a P4 second loan for borrowers with 100 employees or fewer that have lost at least half their revenue due to the pandemic. To be eligible for P4, businesses must have already spent a PPP loan, or be on pace to use the funding, and must prove a revenue loss of 50 percent or more due to the pandemic. A companion bill is also being introduced in the House.

PPP has more than $100 billion in funding still available. The Democrats’ bill would use existing unused PPP funding to make additional P4 loans.

We look forward to further future updates.

The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.