The federal government’s Paycheck Protection Program has received plenty of negative press coverage since its April inception.
It experienced a number of technical glitches, some large companies were publicly shamed and had to return the potentially forgivable loan funding, many minority businesses missed out on the money, and dozens of people were recently charged with trying to steal more than $175 million from the program.
Still, the PPP has been a financial lifeline for many small businesses, and as we face the threat of a second wave of coronavirus hitting the state and country this fall and winter, it’s paramount for Congress to adopt a new version of the program.
I’m not talking about simply allocating new money, but allowing companies — especially those hardest hit by the pandemic in the restaurant, events and hospitality sectors — to receive a second round of PPP funding.
It will be a matter of financial life and death for many businesses, especially as they use up their first round of PPP funds. Twenty-eight percent of U.S. small businesses say they will not make it through the next few months without further government aid, according to a recent survey conducted by Morning Consult on behalf of Verizon Business.
Meantime, more than half of Nutmeg State executives who recently responded to a Connecticut Business & Industry Association survey said they either cut hours, laid off employees, or imposed furloughs because of the impact of the pandemic and related government restrictions. Less than half of those executives said their companies will be profitable this year.
Unfortunately, the prospects of another stimulus bill out of Congress look increasingly slim, especially as November’s presidential election nears.
If gridlock in Washington, D.C., continues, the state should consider funding a second round of its $50-million emergency bridge loan program.
State government obviously can’t significantly move the dial on business aid, but any little bit helps.
During PPP’s first phase, which included two rounds of funding, nearly 60,000 loans worth $6.7 billion were dispensed to Connecticut companies, SBA data shows.
The low-interest loans — part of Congress’ $2-trillion economic stimulus package — were attractive to many small firms because they could be forgiven if employers spend the majority of money on payroll.
Another installment of the program could be more targeted — perhaps focusing only on industries that have faced prolonged closures or limited capacity since March.
For example, restaurants, event venues and nonprofit arts institutions should be considered for more government support.
They aren’t just major employers, they help create the fabric of our community and culture. Do we really want a world in which our only options to dine out post-pandemic are large chains like Chili’s or Applebee’s?
Small independent restaurants are the lifeblood of the small business community, and while Lamont recently expanded indoor dining capacity to 75% starting Oct. 8 — something he should have test run during the summer when infection rates here were at their nadir — many eateries will still struggle this fall and winter as cold weather eliminates outdoor dining options.
Congressional Republicans and Democrats have circulated proposals for another round of PPP funding, but they haven’t been able to agree on a larger stimulus bill.
This is another example, in addition to the U.S.’ failed response to managing the health aspect of the pandemic, of how a starkly divided federal government and nation can’t effectively handle crises.
When the dust settles after the election, bipartisanship must trump partisan politics. At stake is the fate of many small businesses.
