Rep. Mikie Sherrill (D-NJ11) has written the U.S. Treasury Department and the Small Business Administration (SBA) to recommend fixes to the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), the small business relief programs created in the wake of the economic downturn caused by COVID-19. The letter stems from feedback that Sherrill got to a survey she sent small businesses in the 11th Congressional District at the end of April. Verona is part of the district.
Sherrill says she got 342 responses to her survey from 50 different towns across the district, and that almost 74% were from businesses with 10 or fewer employees. There were a number of common themes to the responses, including a lack of access, communication and transparency to the programs, vague guidance on the PPP’s loan forgiveness provisions, and the obstacles that they create to re-opening.
The congresswoman says that while the PPP program was well-intended, over half of the business owners who responded to her survey had no choice but to lay off or furlough workers. “As they look toward the obstacles to reopening, many of these owners find it nonsensical to rehire employees while they are mandated to be closed, and would prefer access to more flexible capital to address their unique challenges as they reopen,” she wrote.
Sherrill’s survey response appears to indicate that businesses across the district had the same problems accessing the PPP program as businesses in Verona. “While the economic impact of coronavirus has been felt across the country, it does not make sense that less than 20% of NJ businesses received PPP funds in the initial round of funding,” she wrote. “In some less affected states, that figure is well over 50%.”
Sherrill is recommending a number of steps to improve transparency and access, from a way to check EIDL status through the SBA’s website to prioritizing PPP approvals for businesses with 10 or fewer employees and requirement that no lender may deny an application based on a minimum loan size. Sherrill also wants to eliminate the requirement that only 25% of a PPP loan can go towards non-payroll expenses and to expand the list of eligible costs under PPP to include those needed to restart operations, such as inventory, disinfectants, and personal protective equipment.
“In the effort to get relief out to our small businesses, it is critical that we respond to the concerns of our small business owners by addressing the gaps and inefficiencies they have identified in the PPP and EIDL programs,” wrote Sherrill. “These programs need to be fixed to better support New Jersey businesses that are struggling through no fault of their own. The perspectives of small business owners have been invaluable as we work to better manage the economic recovery.”
The full text of the letter can be found here.