Lexington, KY – U.S. Congressman Andy Barr (KY-06) delivered a string of much needed lifelines for Kentucky small businesses grappling with the impact of the COVID-19 pandemic and government-imposed lockdowns of our economy. This includes $284 billion in funding for the Paycheck Protection Program (PPP), a simplified PPP forgiveness application for businesses that received PPP loans of $150,000 or less in value, continued relief regarding the accounting treatment of modified loans to allow lenders to modify loans for borrowers and enhancements to PPP loans for the hospitality industry, which has been especially hard hit by the pandemic.
Congressman Barr vigorously fought for all of these measures that were included in the COVID-19 relief package passed by Congress before Christmas of last year. All of this comes on the heels of a report that 18% of Kentucky businesses have closed due to the impact of COVID-19.
“Small businesses, their employees and the families they support are reeling from the impact of prolonged restrictions and lockdowns of our economy,” said Congressman Barr. “In the face of this economic and public health challenge, I pushed in Congress to step-up our support for small businesses. As a result, I secured a new round of forgivable loans to businesses, including access to larger forgivable loans for the hospitality industry, including restaurants and hotels. We have more work to do, but this relief will be a major boost for small businesses in the Commonwealth and throughout the nation.”
A full breakdown of the small business relief provided is below.
Reopening and Expanding PPP:
• $284 billion in additional funds for the PPP. The PPP provided over $5.2 billion in forgivable loans to small businesses in the Commonwealth of Kentucky since its rollout in April.
• Expands eligibility of PPP to more businesses and nonprofits, including 501(c)6 organizations and destination marketing organizations (DMOs) like VisitLex.
• Allows certain businesses to take second draw PPP loans and expands the universe of expenses eligible for forgiveness to align with businesses’ needs.
Deductibility of Business Expenses Paid with PPP Funds:
• Clarifies that businesses may deduct as business expenses applicable payments made with PPP funds. The legislation reverses an earlier Internal Revenue Service guidance that would have effectively taxed business owners during a time of financial strain and uncertainty.
Simplified PPP Application:
• Simplified one-page forgiveness application process for PPP recipients who received loans of $150,000 or less in value. Congressman Barr led multiple efforts in the House to secure streamlined forgiveness for small businesses, including organizing a bipartisan group of nearly 100 Members to push for this fix and co-sponsoring bills to streamline the process.
Extending TDR Lifeline:
• Extends for one year the relief provided to lenders from requirements under generally accepted accounting principles (GAAP) for Troubled Debt Restructuring (TDR) classifications on loans. This will allow lenders to continue to work with their borrowers to modify loans and help borrowers get to the other side of the pandemic. Congressman Barr actively advocated for the extension of TDR relief, noting its importance for retail and commercial borrowers. He discussed this issue directly with Federal Reserve Chairman Jay Powell last month and played a key role in the provision’s original incorporation in the CARES Act.
Help for the Hospitality Industry:
• Provides hotels, restaurants and other hospitality businesses the ability to apply for a PPP loan that is 3.5x monthly payroll as opposed to 2.5x for other applicants. Congressman Barr advocated for the hard-hit hospitality industry and its employees. Congressman Barr co-authored a bill (H.R. 7809) to create a federal assistance facility for struggling commercial real estate, including hotels, restaurants and retail (that bill has over 70 bipartisan co-sponsors). Lastly, Congressman Barr organized a letter to the U.S. Department of Treasury Secretary and the Federal Reserve Chairman requesting assistance for the hospitality industry via their existing authority.
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