Senate Democratic leaders sent a letter to U.S. Small Business Administration (SBA) Administrator Jovita Carranza and U.S. Secretary of the Treasury Steven Mnuchin urging the Trump administration officials to take steps to ensure that the most vulnerable small businesses have access to the important financial resources authorized by the Coronavirus Aide, Relief, and Economic Security Act (CARES Act).
The letter was signed by Senate Committee on Small Business & Entrepreneurship Ranking Member Ben Cardin (D-Md.), Senate Democratic Leader Chuck Schumer (N.Y.), committee member and member of the Senate Small Business Task Force Senator Jeanne Shaheen (N.H.), as well as other Democratic committee members.
The senators pushed the administration to reserve a portion of the $349 billion appropriated to the Paycheck Protection Program (PPP) – a provision included in the CARES Act to provide small businesses and other entities with forgivable, low-interest, zero-fee, and fully guaranteed loans of up to $10 million — for small businesses that do not have relationships with the traditional lenders, especially those in underserved and rural markets, including businesses owned by veterans, minorities, women and businesses that have been in operation for less than 2 years.
The Senators wrote: “We recommend that a portion of available PPP funding be reserved for those borrowers who do not have relationships with the traditional lenders that will dominate delivery of PPP Loans. …Without proactive and sustained outreach, we can expect that underserved communities will be disproportionately harmed – just as they were during the Great Recession when minority business enterprises suffered a precipitous decline in the proportion of SBA-backed loan approvals.”
According to press reports, last Friday, the first day small business owners could apply for PPP loans, large traditional banks are prioritizing existing clients that have a loan, checking account or credit card with the institution.