A pedestrian in a protective mask walks the boardwalk in Asbury Park, New Jersey, USA, on Thursday, July 9, 2020.
Gabby Jones | Bloomberg via Getty Images
Along the east coast beaches that span our home states of Maryland and Delaware, the summer season, generally a boon to our economy, is a shadow of the ordinary.
Business owners in our coastal towns generally suffer losses for up to 10 months a year, then hire staff for a seasonal frenzy that, hopefully, makes enough profit to make it to the next year. However, for the iconic surf shops, ice cream parlors, and pizzerias that line the boardwalks of Rehoboth Beach, Del. And Ocean City, Maryland, the COVID-19 pandemic has changed all that.
Federal aid through the Paycheck Protection Program (PPP) and other initiatives enacted by Congress has reached small businesses like these, but it has been too little for many. Fortunately, we were able to extend PPP for another five weeks, but many companies simply face the reality that they may not survive, and those on the brink tend to have little cash reserves or access to credit. Across the United States, these vulnerable small businesses are also disproportionately owned by women, veterans, or minorities.
That is why we are working to pass legislation that does two things: First, make PPP funds available to eligible companies at least until the end of this year, and second, authorize a second round of forgivable loans. for companies most severely affected by the pandemic.
Without aggressive new support for endangered companies, this iconic aid program will not be able to match the nature of this crisis.
We want to double the PPP because, despite its uneven start, it has clearly worked and prevented millions of business closings and job losses. Thanks to the work of some 5,500 community banks and financial institutions, small businesses across the United States were able to access much-needed cash to pay or rehire workers and stay afloat.
Now, with recent changes passed by Congress, businesses have additional flexibility in the way they use those funds, allowing more loans to be forgiven. Most importantly: The money that small American businesses need has already been approved by Congress; Because the PPP program still has $ 130 billion in unspent funds, the program can handle a second round of specific loans, which we call Prioritized Payment Check Protection Program, or P4.
The P4 loan would be available to companies with fewer than 100 employees who experienced a quarterly loss of revenue of 50% or more, relative to the same quarter in 2019. The loan amount could be as large as allowed for the first round of PPP loans. To make sure that smaller employers get their share of support, our bill sets aside $ 25 billion, or 20% of program funds, for companies with 10 or fewer workers.
Without aggressive new support for endangered companies, this iconic aid program will not be able to match the nature of this crisis.
More than half of the arts, entertainment and recreation industry workers lost their jobs between February and April, and almost half of those in housing and food services lost their jobs. Compare these numbers to those of the financial and insurance industry, which cut just 0.5% of its jobs in the same period, and it’s clear that business relief should actually be scaled up as needed.
Some of our Senate colleagues have planned new small business aid programs, but the reality is that the most threatened small businesses need help now, and it takes time to get a new federal program up and running. Keep in mind that the High Street Loan Program, a cousin of PPP established by the Federal Reserve to help midsize businesses, is still taking off.
The federal government has provided hundreds of billions of dollars to help American companies overcome this crisis, but much work remains to be done. By simply reusing the money already approved by Congress for another round of aid targeting small businesses, we can save thousands of endangered small businesses, the jobs they provide, and the major streets and boardwalks in America that make it possible.
US Democrats Sens. Ben Cardin and Chris Coons represent Maryland and Delaware, respectively.
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