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Window For Accessing A PPP Loan For Region’s Small Biz’s Closed 2 Weeks Ago; EIDL Grant Availability Has Run Dry And SBA-Imposed Caps on EIDL Loan And Grant Amounts Has Restricted Assistance, Risking Vital Lifeline For Thousands Of Businesses Across NY 

Schumer Pushes Vital Two-Pronged Legislation To Provide Economic Relief To Capital Region’s Small Businesses By 1) Extending PPP Program To 2021 & Offering New Second Round of Forgivable PPP Assistance, And 2) Adding $180 Billion To National Pot For EIDL Grants And Loans, & Lifting Cap From $150K To $2M For Loans & Guaranteeing $10K Grants For Each Loan Applicant

Schumer: PPP Extension & Expansion And Additional EIDL Funding And Reforms Are The Lifeboats Upstate Small Biz Need To Recover & Rebuild From Health -and Economic- Pandemic

Standing at Rulfs Orchard and Farm Store in Peru, New York, U.S. Senator Charles E. Schumer will unveil his two-pronged plan to help small businesses across the North Country and Upstate New York. Schumer’s plan will first, extend the PPP loan period to the end of the year to allow the program to continue to offer assistance, which is critical given that the program’s ability to make new loans came to an end on August 8th, and provide the option for a second PPP forgivable loan for eligible small businesses that are in need of additional assistance to survive, and second, provide additional funding for the EIDL program and lift the SBA-imposed caps that restrict the size of loan and grant awards.

Schumer explained that the Prioritized Paycheck Protection Program Act, or ‘P4’, he has cosponsored seeks to provide additional relief for New York’s smallest businesses that have been severely impacted by the economic effects of the COVID-19 pandemic. Specifically, ‘P4’ second loans allow small businesses to access funds worth 250 percent of monthly payroll costs, up to a maximum of $2 million. Hard-hit small businesses and nonprofits with fewer than 100 employees, sole proprietors, independent contractors, self-employed borrowers, and rural and historically underserved communities will be eligible for this second round of assistance. These second PPP loans would be fully forgivable similar to the first PPP loans as long as all requirements are met in the use of funds. Schumer said that any new stimulus package must target assistance to hard-hit North Country small businesses like Rulfs Orchard and Farm Store, and borrowers in historically underserved communities. Citing data from the New York State Department of Labor, Schumer further explained that the private sector job count in the North Country fell by 14,200 or 12.6 percent, during the 12-month period ending in June 2020. Schumer explained that this data points to a critical need for federal support to revive the region’s economy, including aid to help small businesses weather the crisis and to put them on a road to recovery as the lynchpins of our communities.

The senator said that his ‘P4’ legislation will reserve 20% of PPP funds for employers with 10 or fewer employees and ensure priority processing for such businesses and nonprofits, in conjunction with priority processing for underserved and rural borrowers across the North Country, including veterans. To further make sure that the funding is reserved for the hardest-hit small businesses, the ‘P4’ loan would not be available to publicly traded companies.

Furthermore, Schumer threw his support behind the bipartisan Emergency Injury Disaster Loans (EIDL) For Small Businesses Act in upcoming ‘COVID-4’ legislation. The EIDL for Small Businesses Act would provide a total of $180 billion in additional appropriations for the EIDL program—$100 billion for the loan program and $80 billion for the Advance grant program—lift the SBA-imposed cap of $150,000 on EIDL loans to allow for the award to be up to $2 million, and eliminate the SBA policy of providing $1,000 per employee for the EIDL Advance grants to ensure all loan applicants receive the full $10,000 grant created by the CARES Act. This proposal would also retroactively provide businesses that already received loans and grants from the program with the full amount they would have qualified for had the SBA restrictions not been in place. These additional funds will be awarded without the need for additional documentation.

”PPP and EIDL have been a lifeline for North Country small businesses struggling to stay afloat during these turbulent times,” said Senator Schumer. “However, as New York seeks to recover from the crisis, we need to do even more for businesses hardest-hit by the pandemic. These proposals will bring much-needed changes to the existing PPP and EIDL programs to make forgivable loans, grants, and long-term assistance to provide extra relief to small businesses and nonprofits in the North Country that are struggling the most.”

As of mid-July, the EIDL Advance grant program ran out of funds, so small businesses are no longer able to receive this financial relief until the program is recapitalized. New York State small businesses have been awarded over $1.3 billion in EIDL Advance grants and over $16.5 billion in EIDL loans. 

Schumer added, “As the North Country reopens and begins to carefully rebuild from the pandemic, the federal government should do everything in its power to secure additional relief small businesses that pour jobs into their communities and are essential to the fabric of New York. Many of New York’s hard working business owners are hurting from the pandemic, and the Senate must move immediately to get them the federal support they need to make it through the economic crisis.”

Schumer will be joined by Garry Douglas, President of the North Country Chamber of Commerce, Shannon Wilkins and Amanda Whisher. co-owners of Rulfs, John Momont, owner of Plattsburgh RV/Blue Haven Campground/Plattsburgh Creative Signs, Kari Prevo, Controller of the Plattco Corporation, and Brandy McDonald, Supervisor of the Town of Peru, who share these sentiments and recognize the importance of this critical legislation that targets hurting businesses.

Details on the Prioritized Paycheck Protection Program Act, or ‘P4’, appear below. ‘P4’ loans:

  • May be as large as 2.5-times monthly payroll costs, just as under initial PPP loans, but may not be any larger than $2 million. (Affiliated businesses with separate locations may pursue separate P4 loans, but in aggregate the loans may not exceed $2 million.)
  • Allow borrowers to apply for forgiveness as early as eight weeks after the loan is disbursed and they have fulfilled payroll requirements, rather than make them opt-in to 8 weeks or wait until the earlier of 24 weeks or December 31, which needlessly increases the cost of the loan as interest accrues, tying up money that could be deployed for paychecks.
  • Are not available to publicly traded companies.
  • Except as otherwise mentioned, are subject to the same terms, conditions, and forgiveness criteria as initial PPP loans.
  • Provide lenders a minimum processing fee of $2,500 per P4 loan to ensure lenders do not lose money by processing small-dollar loans or cherry pick larger loans.

To increase access to PPP (initial and P4) assistance to underserved businesses, the bill reserves the lesser of $25 billion or 20% of PPP funds for employers with 10 or fewer employees, along with priority processing for such firms, harmonized with priority processing for underserved and rural borrowers. The bill also requires SBA within five days to issue guidance, as required by the CARES Act, which instructs lenders to give priority in loan processing and disbursement to underserved and rural borrowers, including veterans. It also requires SBA to update the PPP loan application to collect demographic information on PPP recipients.

Details on the EIDL for Small Businesses Act appear below. The bipartisan EIDL for Small Businesses Act will:

  • Provide $100 billion in appropriations for EIDL loan program;
  • Provide $80 billion in appropriations for EIDL Advance grant program;
  • Prohibit the U.S. Small Business Administration (SBA) from placing maximum caps below $2 million on Economic Injury Disaster Loans;
  • Prohibit the SBA Administrator from placing limitations on the EIDL Advance and all eligible small business would receive the full $10,000 grant regardless of size;
  • Require EIDL Advance grants to be disbursed to eligible small businesses within three business days of request and not be contingent upon approval for EIDL loan;
  • Require SBA to provide current EIDL borrowers and past business recipients of EIDL Advance to receive retroactive, before caps were placed, additional support without the need for additional documentation; 
  • Require SBA to submit a monthly report to the House and Senate Committees on Small Business and Appropriations on 1) the status of the Disaster Loan Account, including obligations, allocations, and amounts undistributed/unallocated; 2) allocations, obligations, and expenditures for all open disasters; and 3) an estimate of when available appropriations will be exhausted.