PROVIDENCE – If you started a small business after Feb. 15, 2020, you are out of luck when it comes to getting in on the popular Paycheck Protection Program.
A bill introduced in the R.I. House of Representatives on April 16 seeks to help these newer small-business owners by creating a state-run version of the U.S. Small Business Administration loan program for which both existing and new businesses could qualify. The legislation, introduced by Rep. Justine Caldwell, D-East Greenwich, in conjunction with R.I. Treasurer Seth Magaziner, would use federal stimulus money to prop up a PPP-like program offering up to $25,000 in forgivable payroll loans to new, existing or restarted businesses with 50 or fewer employees.
Caldwell in an interview with PBN on Monday said she introduced the bill based on a presentation Magaziner gave to the House Small Business Committee. Caldwell said she has spoken to a number of business owners who were in the midst of opening or starting additional businesses when the COVID-19 pandemic hit and whose plans were delayed due to the economic recession and health-related restrictions.
“Generally, our goal is to make it easier for people to open businesses in Rhode Island,” she said.
Exactly how much money would be put into this program has not been decided – the intent is to present a framework and decide funding later on, according to Rosie Hilmer, a spokeswoman for Magaziner’s office. While the legislation proposes having R.I. Commerce Corp. create and run the program, the state could also partner with third-party administrators if needed, Hilmer said in an email.
As proposed, recipients would have their loans forgiven if they used the money for payroll costs and salaries, group health care benefits, mortgage payments, rent, utilities, debt interest, capital equipment, legal fees, and licensing and permitting costs.
Sole proprietors, independent contractors and “eligible self-employed individuals” could also receive funding.
The bill has been referred to the House Finance Committee, and no hearing has been scheduled.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
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