Press Release

Q&A with Financial Services Committee Ranking Republican McHenry on Small Business Payroll Assistance

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Washington, April 6, 2020 | comments
Since its launch last Friday, April 3rd, small businesses around the country are able to start applying for payroll support through the Paycheck Protection Program. This critical provision in the recently passed bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act provides more than $350 billion in small business loans to support those hit hardest by the coronavirus pandemic.

Congressman Patrick McHenry (NC-10), the Ranking Republican of the House Financial Services Committee, provided answers to some of the top questions about the program:

Who can apply for assistance through the Payroll Protection Program?

“Our nation’s small businesses with 500 or fewer employees can apply for this relief. That includes nonprofits, charities, faith-based organizations that meet the criteria, veterans’ organizations, and tribal businesses. Folks that are self-employed, sole proprietorships, and independent contractors can also apply—providing support to the many Americans who may not classify as a traditional employee.”

What kind of loan can a small business in need get and how should they use it?

“The number one goal of this program is to keep Americans employed. These funds will be provided in the form of a two-year, 1% fixed rate loan that is intended to be fully forgiven if 75% of the loan is used to keep workers on payroll. The other 25% can be used to meet a small businesses’ day-to-day needs, like paying mortgages, rent, interest payments and utilities. Loan amounts can be up to two and a half times the average monthly payroll costs from the last year, subject to a $10 million cap.”

How should a small business apply?

“A small business can apply through any Small Business Administration (SBA) 7(a) lender. I would suggest that small businesses apply through their existing federally insured financial institution—whether that’s a bank, credit union, or Farm Credit System institution that is participating—as this will speed up the process as most banks are prioritizing existing customers. The program will continue to build capacity as it continues to roll out. If your lender is not currently a participant, they may apply through a streamlined process. Additionally, other financial institutions in your community may be available to provide assistance.”

What’s changed since last Tuesday when the guidelines were first released?

“We’ve been working with Treasury Secretary Mnuchin and the SBA to maximize the number of federally insured financial institutions that are participating in the program and providing loans to small businesses. What most of these financial institutions needed was more information and clear guidance for this new program. On Thursday, SBA issued an interim final rule that specified additional details of the program, providing clarity for borrowers and lenders alike. We are still working with the SBA and Treasury to include new lenders, to help as many small businesses as possible, especially mom and pops.”

Find applications and additional program details here.
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