While the initial CARES Act – and the Paycheck Protection Program (PPP), specifically – helped to keep small businesses solvent through the early stage of the pandemic, many companies that received funding have exhausted those resources and are in danger of closing. More than $521 billion in “forgivable loans” has been distributed to more than 5.1 million small and mid-sized companies from Alaska to Maine through PPP.
However, many companies still await confirmation that these loans have been forgiven. As a result, they are unlike to apply for any more funding until they have confirmed that they are no longer “on the hook” to repay their first cash infusion from the government.
In an online forum discussing how best to help struggling small businesses this week, U.S. Rep. Adriano Espaillat (D, NY-13) and U.S. Rep. Kevin Hern (R, OK-01) stressed bipartisanship and provided insights into Congressional efforts to support business owners during the coronavirus pandemic.
Espaillat and Hern, both members of the House Small Business Committee, participated in an online forum, Small Business and the COVID-19 Pandemic hosted by Biz2Credit on Oct. 15. The Congressmen discussed the success of government initiatives, the areas in need of improvement, and the status of negotiations in Washington on a so-called “PPP 2” stimulus package.
“These are very pressing issues that small businesses are and have been dealing with and trying to work through,” Espaillat said. “Over the course of this COVID-19 pandemic, I have worked with many small businesses whose livelihoods have been on the brink and kept going in the worst of recent times with the aid of the Paycheck Protection Program and Economic Injury Disaster Loans.”
“As our discussion elicited and my thoughtful colleague Congressman Hern highlighted, uncertainty is a very real and pressing concern,” Rep. Espaillat added. “It’s why the House of Representatives continues to debate and pass legislation with greater refinement and focus to meet the needs of small businesses from New York City to Tulsa.”
A former aerospace engineer for Rockwell, Rep. Hern started his first small business in 1985 specializing in computer and software applications. Then he started saving to purchase his first McDonald’s restaurant and eventually built an organization that owns 18 McDonald’s franchises and employs over 1,000 people in the Tulsa, Oklahoma area.
“Small businesses around the country are hurting, and they want action from Congress. As a business owner myself for more than 30 years, I understand the worry and stress they feel in the face of such uncertainty,” Hern said.
“Our discussion highlighted strong bipartisan proposals in the House that could bring immediate relief to business owners should the Speaker put it up for a vote. I’m glad my colleague Rep. Espaillat was able to join in the conversations, we found common ground in support of American small businesses.”
Even though they are from opposing political parties, both Rep. Espaillat and Rep. Hern understand that small businesses are struggling, and given their importance in private sector job creation, it is critical for the overall economy that they get assistance in order to survive the unprecedented circumstances surrounding the response to the coronavirus pandemic. Small business owners need clarity on PPP forgiveness, along with resumption of the government lending program. Many businesses will need a second cash infusion to keep going before the year is out.
It is encouraging that the SBA has partnered with the private sector and increased the automation used to streamline PPP loan application submissions, as well as the forgiveness application process. Making the process easier has helped literally millions of small business owners to secure the financing that has kept their companies alive.
“It is important for business owners to work with lenders’ online platforms, their payroll companies, and their CPAs to navigate the PPP relief process and their applications for PPP 2,” said Erik Asgiersson, CEO of CPA.com, who also participated in the online forum with the Congressmen.
“Leveraging tools for the forgiveness stage and getting ready for the next stage of business relief is critical for the survival of small businesses,” Asgiersson explained. “The PPP program is really a public-private partnership between small businesses and government. Technology helps simplify the forgiveness process of the first round of PPP and, eventually, the application process for PPP 2.”
Asgiersson added that “Just like you don’t do your taxes with pen and paper, if you want to implement business relief, you need to work with your CPA and also take advantage of the online processes.”
In a recent interview with Fox Business, Federal Reserve Chair Jerome Powell said another iteration of the Paycheck Protection Program is likely the best way to continue supporting small businesses suffering as a result of the coronavirus pandemic. The first round of PPP ended on August 8. Now, more than two months later, business owners that are struggling because of the lingering effects of government regulations and the continued spread of coronavirus across the country are waiting for a lifeline. As the Congressmen clearly articulated, this is an issue that transcends politics; for the country to thrive economically, small business owners need help to get through this rough patch.
The pandemic won’t last forever, but millions of businesses may not see the end of the pandemic if action isn’t taken soon. It’s imperative that we do everything we can to ensure we have these businesses in existence once we return to a “new normal.”