Small businesses to get another chance at SBA loans
$310 billion to be added to Paycheck Protection Program
Several businesses on Guam and the CNMI were frustrated upon receiving notifications that the Small Business Administration no longer accepts applications for loans under the Coronavirus Aid, Relief, and Economic Security or CARES Act after the funding were exhausted.
Negotiations are now complete on adding another $310 billion to the Paycheck Protection Program under CARES Act, supplementing the initial $350 billion that was used up last week, according to Rep. Gregorio Kilili Sablan, the CNM's delegate to the U.S. Congress.
In the first round of the Paycheck Protection Program, 508 organizations on Guam were able to borrow $102.4 million. In Hawai’i 11,553 businesses and non-profits borrowed over $2 billion. In the CNMI, 56 businesses were awarded loans worth $12.6 million.
New applicants were turned away because funds were exhausted.
Sablan advised businesses and non-profit organizations that applied too late for the first round of funding to prepare now to apply for round two. “These are first-come, first-served monies; and we have already seen how strong the demand is. So, get ready.”
The Paycheck Protection Program, run by the Small Business Administration, provides loans to allow businesses and non-profits with fewer than 500 employees to keep paying staff despite being shut down by the coronavirus. Some loan funds may also be used to cover rent, utilities, and other on-going expenses. Loan recipients who keep staff on payroll for eight weeks and meet other conditions may have the loan converted to an outright grant.
Now that negotiations are complete, the Senate is expected to vote today on approving the additional funding and the House on Thursday.
“Another important result of this week’s negotiations,” Sablan said, “is that $60 billion is set aside for small lenders and community-based financial institutions, to serve the needs of unbanked and underserved small businesses and nonprofits—especially rural, minority, and women-owned businesses. That could improve the odds for Marianas businesses and non-profits."
Although an initial bill drafted by Senate Republicans last week only included more PPP money and had no set-aside for rural areas, like the Marianas, Democrats insisted on the set-aside and that the new bill also include funding for hospitals, community health centers, and other healthcare providers at the frontline in the fight against the coronavirus pandemic.
In negotiations, Democrats secured $75 billion to help with coronavirus-related expenses, such as the costs of Personal Protective Equipment, and to reimburse providers for lost revenue. $100 billion was provided in last month’s CARES Act for these purposes.
Democrats also secured $25 billion for testing, which experts say is the key to reopening the economy. Democrats were able to get Trump administration negotiators to agree to a national strategic testing policy that will focus on increasing testing capacity, including testing supplies, nationwide.
“We only have to look at the example of Germany and South Korea, which did such a good job of widespread national testing, reduced the spread of the virus, and are now inching toward reopening the economy, to know how what America needs to do,” Sablan said.
“This additional money and the administration’s agreement to carry out a national testing policy will finally start America moving in the right direction.”
Sablan did express disappointment that another Democratic goal—funding for local government operations—was rejected by the Republicans and the Trump administration.
“The White House’s refusal to provide more relief to states and territories, like the Marianas, where revenues have plunged because of the coronavirus, will make it that much harder for local governments to meet their obligations and provide essential services.
“We have already seen the Commonwealth cut funding for retirees, stop paying teachers, and reduce government work-hours,” Congressman Sablan said.
Sablan made direct aid to local government a top priority during negotiations on the CARES Act last month. The Marianas received $34 million in direct aid.
Now that interim funding for the Paycheck Protection Program and healthcare is being addressed, he plans to keep pushing for more help for local government services in what many are calling CARES II legislation.
As Vice Chair for Insular Affairs, Sablan led a letter from Pacific-area Delegates to Congress two weeks ago that specifically targeted direct aid for education, water and sewer infrastructure spending, and full inclusion of the insular areas in federal health insurance programs, such as Medicaid, for CARES II.