This letter was sent to the Washington federal delegation on November 19, 2020. GSBA is a signatory.
Members of the Washington State Congressional Delegation:
We urge immediate Congressional action on small business relief to mitigate the continued and rapidly worsening impacts of COVID-19. The situation facing small business is dire. Washington State is experiencing the worst levels of infection and hospitalizations since the onset of the pandemic. Small businesses, trying to hang on since the spring, will likely be destroyed without further provision of significant federal emergency aid. Thousands more jobs will be lost as workers and families are already struggling – Washington led the nation in new unemployment claims the first week of November. This was the largest weekly increase reported by any state over this period and the largest increase in Washington State since mid-March 2020.
Here are specific actions we believe Congress should take before Thanksgiving:
- Reauthorize the Paycheck Protection Program (PPP), which expired on August 8, and extend it through June 2021.
- Allow existing PPP borrowers to apply for a second PPP loan and allow a more flexible use of proceeds so that businesses can use the funds for personnel as well as other costs they must incur in order to survive until the pandemic is under control and normal business operations can resume.
- Extend the Economic Injury Disaster Loans (EIDL) authorization through June 2021.
- Mandate that the Small Business Administration (SBA) lift the $150,000 per loan cap. Small businesses need to be able to borrow the amount they need to weather the pandemic’s disastrous impacts.
- Allow EIDL borrowers to get a second EIDL if needed due to the long duration of the pandemic or due to the previously imposed small loan size caps. Congress should clarify that the SBA should not deduct EIDL advance grants from the PPP forgiveness calculations. EIDL and PPP are separate programs.
- Reinstitute the SBA debt relief provisions related to 7a, 504 and micro loans. This useful set of relief tools expired on September 27, 2020. Congress should again authorize these relief provisions and extend them through June of 2021.
- As called for in the RELIEF for Main Street Act, sponsored by Senators Murray, Booker and Daines, invest in Community Development Financial Institutions as well as state and local economic development loan funds. Investing in the alternative access to capital delivery system will help ensure dollars will get to minority and women-owned firms and smaller enterprises.
- Create a streamlined process for PPP forgiveness. Currently, the SBA is using a streamlined process for PPP loans under $50,000. Congress should extend the streamlined process requirement to loans under $150,000. The volume of PPP transactions that needs to go through the forgiveness process is vastly larger than what SBA is staffed to handle. In Washington State alone there were over 107,000
PPP loans approved for over $12.3 billion. Each one of these must go through the forgiveness review process. Nationally over 85% of the PPP transactions are under $150,000 but represent only 30 percent of the funding. It is just more practical to forgive the smaller loans using a streamlined method and focus the agency review resources on the larger dollar transactions.
- Extend the state and local government spending deadlines for CARES Act funding through 2021 and clarify that repayments from loans made with CARES Act funds can be retained for further small business support and recovery purposes.
Thank you for your consideration of our request. We recognize the complexity of these issues and appreciate your consideration of our suggestions.
Members of the Washington State Small Business Recovery Working Group