Trade groups push for more access to PPP loans in coronavirus relief package

The group that represents trade associations is stepping up advocacy efforts to eliminate restrictions to lobbying groups in the Paycheck Protection Program (PPP). 

The American Society of Association Executives (ASAE) is lobbying to remove the barriers that 501(c)(6) PPP loan applicants can only receive loans if lobbying does not account for 10 percent or more of their total activities. The Senate GOP relief bill includes those limitations; the recent House-passed HEROES Act does not, and would make any 501(c)6 of any size eligible for a loan.

“[I]t’s vague and confusing and is going to create a lot of uncertainty for organizations trying to figure out if they can apply,” Chris Vest, ASAE director of public policy, told The Hill.

501(c)(6) organizations, which include trade associations, professional societies and local chambers of commerce, were left out of the program when Congress passed its $2.2 trillion coronavirus relief bill in March.

The new relief bill approved by the House earlier this year would allow such groups to apply for PPP help, but included a provision that prevents any business that has a lobbyist on its payroll from counting that lobbyist in calculating payroll costs in seeking PPP loans.

Businesses with lobbyists on their payroll can still apply for PPP loans, which are available to companies with up to 500 employees, but any lobbyist would not count as an employee. 

Vest said the restrictions outlined in the House Democrat’s coronavirus relief bill, which was released in May, were “more acceptable and fully address concerns from lawmakers about lobbying.”

Critics argue that reducing the restrictions on PPP loans for trade groups will lead to well-connected lobbying firms taking advantage of money that would otherwise be set aside for small businesses.

“If Congress is going to make trade groups eligible for the PPP, there need to be serious restrictions on who can apply,” said Andrew Perez, executive director of the Democratic Policy Center. “We believe that Congress should restrict PPP eligibility to trade groups that spend less than 5 percent of their revenue on lobbying, which ASAE says is the norm. They should also restrict eligibility to groups that have fewer than 50 employees, as the Collins-Rubio bill previously did.” 

“Our research shows that 99.8 percent of trade associations have fewer than 300 employees. The revised measure from Sens. Collins and Rubio is far too broad and would allow major lobbies like PhRMA to qualify for government assistance. It’s obscene,” he added in a statement to The Hill.

When emailed for comment, neither representatives for Sens. Marco Rubio (R-Fla.) or Susan Collins (R-Maine), the authors of the provision in the GOP bill that included 501(c)(6)s in PPP, responded to ASAE’s criticism of the bill’s language.

The U.S. Chamber of Commerce also supports a broad approach to including these organizations.

“The U.S. Chamber would prefer as broad an inclusion as possible, knowing that every non-profit would need to certify their need for a PPP and prioritize employee payroll when spending PPP loan proceeds,” a spokesperson told The Hill.

The business group has been pushing for local chambers of commerce, as well as other associations, travel and tourism organizations, farm bureaus, and direct marketing organizations to be able to receive federal financial assistance.

The U.S. Travel Association, which represents the travel industry, applauded the GOP bill for including nonprofit and quasi-governmental tourism marketing organizations in PPP.

Updated at 9:05 p.m. to include information about the HEROES Act.