The RESTART Act would support small- and mid-sized businesses that have been hit the hardest by the coronavirus crises.
By Forum Staff
A group of more than 30 senators have cosponsored the bipartisan Reviving the Economy Sustainably Towards a Recovery in Twenty-Twenty (RESTART) Act to support small- and mid-sized businesses that have been hit the hardest by the coronavirus crises, Sen. Kirsten Gillibrand (D-N.Y.) recently announced.
According to the senators, while the Paycheck Protection Program was intended to support small- and mid-sized businesses weather the economic crisis caused by COVID-19, many have slipped through the cracks and are struggling to maintain operations and pay their employees. Theaters and live events, restaurants and hospitality make up a significant part of New York’s economy and have faced unprecedented revenue losses since March. Across the country, independent venues are forecasted to lose almost $9 billion in revenue if the rest of 2020 remains dark and the majority expect to permanently close if shutdowns persist and no federal funding becomes available. The RESTART Act would provide a lifeline for these small businesses, which have been unable to access PPP by creating a new loan program to fund six months’ of payroll, benefits, and fixed operating expenses for businesses that have lost substantial revenue due to the pandemic.
Specifically, the RESTART Act would:
- Provide access to loans to cover six months’ of payroll, benefits, and fixed operating expenses for small and mid-sized businesses and nonprofits that have suffered significant revenue losses and would provide an extended 12-month covered loan period for businesses that have seen revenues decline by at least 80 percent;
- Forgive a share of loans based on revenue declines suffered by the recipient in 2020 (or during the six-month covered loan period) compared to a year earlier, with the remainder to be paid back over seven years, with generous loan terms. Businesses with fewer than 5,000 employees would receive even more favorable terms on loan forgiveness;
- Offer more favorable loan terms to nonprofits, including a longer duration and a lower interest rate;
- Defer interest payments for the first year of the loan, and defers principal payments for the first two years, with additional deferral available to economically distressed firms;
- Build an origination fee structure designed to provide an incentive for banks and other financial institutions to assist the smallest businesses;
- Allow businesses to choose when to rehire their workers and when to deploy the capital;
- Provide a 100 percent loan guarantee from the federal government.
“Small businesses—including theaters, venues, and restaurants—make New York a world renowned destination and we must help them survive this economic crisis,” Gillibrand said. “Unfortunately the PPP program didn’t go far enough to support small businesses across the country, but the RESTART Act would help fill the gaps and ensure they receive the support they deserve. I’m proud to work with my colleagues across the aisle to push for this important legislation in the next relief package.”
According to a recent CNN report, Treasury Secretary Steve Mnuchin recently voiced support for the legislation.