Newsletter: Our Small Businesses Need More Funding

I know many of you who are small business owners are frantically trying to navigate through this crisis, and are frustrated by the fits and starts with the Small Business Administration (SBA) loan programs, both Emergency Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP). From difficulties completing online forms, to getting through to the SBA, and now news that the funds have run out of money, these programs are not yet delivering the promised relief.

I share your frustrations and am working to address many of the challenges.

Watch my video message to local small businesses.

Let me first discuss PPP - Paycheck Protection Program. This program is part of the CARES Act Congress passed at the end of March. Congress's intent was to help employees by channeling money to small business employers - the 30 million businesses that employ 55 percent of our workforce. These are forgivable loans, covering eight weeks of payroll up to $10 million with simple qualifying rules intended to get money to you fast. This aid was to be specifically targeted to small businesses with less than 500 employees. The House initially wanted to invest more than $500 billion but the Administration and Senate insisted on a smaller amount. The compromise was $349 billion dollars.

Sure enough, PPP ran out of money on Friday because the demand was so high. SBA reports more than 1.7 million business were approved for loans, but I have heard from countless small businesses that have not be able to get the intended assistance. This is unacceptable. Furthermore, we learned that Ruth's Chris Steak House received $20 million. This is a publicly traded company with 5,000 employees. They received two times the set maximum loan amount and 83 times the average loan size. We need to determine how many other large companies got loans, or how many other companies double dipped.

The problems we see with the program are exactly why we need real oversight to ensure that systems are in place, that loans are going to the right people, and that no one is allowed to double dip.

So yes, we need to get further funding into the program, and I am working to do so. But we also need the Trump Administration to deliver the program as intended by Congress to the small businesses that need the money so they can bring their employees back.

The EIDL – Economic Injury Disaster Loans were part of the very first Covid-19 bill passed by the House on March 4. These are intended to be working capital loans with an initial program size of $7 billion. The maximum loan was set at $2 million, with three week approval process, and a $10k advance available within three days of applying. There has been so much demand that the SBA took it upon themselves to cut the loans, and now many people are being told by the SBA that they need to reapply. Like the problems with the PPP program, this is unacceptable.

Here's what I'm working to do:

• First, we need to get more money into both programs as quickly as possible. I support the plan to add $250 billion into PPP immediately. Congress needs to put aside the partisan games and get this done now.
  
• We also need to add provisions to automatically extend the loan funding if the stay at home orders extend beyond 8 weeks so that we don't find ourselves in the same hole two months from now. I have co-sponsored legislation that would create these automatic "stabilizers." We cannot leave businesses hanging while partisan politics plays out once more in DC.
  
• We also need to create a separate loan facility for businesses to access the capital necessary to navigate the uncertainty of this first phase of the pandemic and plan for an uncertain future once we start go get back to work. This will likely have to be as large as the PPP program designed to help employees, only this will focus on helping the employers put in place the strategies to return to work and once again drive our economy.

To the small businesses in our community, please know that I hear you. I appreciate your frustrations. I will fight tooth and nail to get the programs funded as soon as possible, as well as the desperately needed money to our hospitals and health care workers, and our state and local governments—all with the necessary oversight to make sure the money goes where it is supposed to.

Stay strong,