SCHUMER: AS THE PANDEMIC RAGES ON, DEVASTATING WNY ECONOMY, MANY SMALL BUSINESSES NEED SECOND PPP LOAN TO STAY AFLOAT; AT WNY BUSINESS, SENATOR PUSHES TO EXTEND “PPP” PROGRAM TO GIVE LOCAL SMALL BIZ OWNERS ANOTHER LOAN & CONTINUED ASSISTANCE; WNY’S ECONOMIC RECOVERY IS CRITICAL FOR ALL OF NYS
Window For Accessing A PPP Loan For Western New York’s Small Biz’s Will Close In Weeks
Schumer Pushes Vital Legislation To Provide Economic Relief To Western New York’s Small Businesses, Extending Program To 2021 & Offering New Second Round of Forgivable PPP Assistance To Hardest-Hit Small Businesses And Nonprofits
Schumer: PPP Extension & Expansion Is The Lifeboat Western New York Small Biz Needs To Recover & Rebuild From Health -and Economic- Pandemic
Standing at Partners Packaging Inc. in South Buffalo and on the heels of a successful five-week, short-term extension for the original Paycheck Protection Program (PPP), U.S. Senator Charles E. Schumer unveiled the Prioritized Paycheck Protection Program Act, or ‘P4’ Act, which 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.
Schumer will explain that this proposed legislation would provide much-needed relief to Western New York small business owners by extending the PPP loan period to the end of the year and providing the option for a second PPP loan for eligible small businesses that are in need of additional assistance to survive. Specifically, ‘P4’ second loans will allow for businesses to access funds worth 250 percent of monthly payroll costs, up to a maximum of $2 million. 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, in an effort to get critical federal aid to the most in-need businesses that have lost 50% or more of revenues due to the pandemic. 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 Western New York small businesses like Partners Packaging, Inc., and borrowers in historically underserved communities like Buffalo. Citing data from the New York State Department of Labor, Schumer further explained that the private sector job count in Western New York fell by 113,400, or 20.6 percent, to 437,200 during the 12-month period ending in May 2020.
”The PPP has been a lifeline for Western New York small businesses struggling to stay afloat during these turbulent times, and last week, I fought to ensure that the program would continue to support our hard-working New Yorkers for at least another month,” 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. This legislation will bring much-needed changes to the existing PPP program to make loans more accessible to the smallest businesses and nonprofits in Western New York that are struggling the most and make a second round of relief possible for businesses that need the extra support.”
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 Western New York, 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.
Schumer noted that Western New York labors statistics show more than a 20% decline in private sector employment during the pandemic. 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.
Schumer was joined by County Executive Mark Poloncarz and Buffalo Mayor Byron Brown who share these sentiments and recognize the importance of this critical legislation for PPP reform that targets hurting businesses.
The Senator was also joined by Bob Cefalu, owner of Partner’s Packaging Inc. who shared his first-hand experiences with the Paycheck Protection Program, including their use of the funding to expand their business to help aid other small businesses with re-opening.
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.