Ryan, Ohio Delegation Call for Extension of PPP Forgiveness Deadline
YOUNGSTOWN, Ohio – In a letter to congressional leaders, eight members of Ohio’s delegation including U.S. Rep. Tim Ryan, are urging for the extension of the forgiveness deadlines for emergency loans made through the Small Business Administration.
Currently, loans made as part of the Paycheck Protection Program are to be forgiven if a business maintains its pre-virus employment levels after eight weeks of receiving the loan.
Some businesses, primarily those in the restaurant and hospitality fields, have said that eight-week deadline isn’t enough time to bring staff back, as business isn’t likely to return to pre-virus levels immediately after reopening.
The coronavirus relief bill that included the PPP also had a provision allowing for advance payments of up to $10,000 for Economic Injury Disaster Loans. The Ohio delegation – Ryan and Reps. Brad Wenstrup, Steve Stivers, Anthony Gonzalez, David Joyce, Marcia Fudge, Bob Gibbs and Troy Balderson – is calling on Congress to raise that amount $20,000 to “better serve those businesses in the hospitality industry that have suffered devastating revenue losses but must still meet their financial obligations.”
“We need to recognize the reality on the ground in Ohio and in states across the country. The current deadline for loan forgiveness in the PPP program must be extended,” Ryan said in a statement. “We are nowhere near where we need to be to fully reopen our economy, and if we do not extend this deadline, it will be small businesses and their employees who bear the brunt of this pain.”
The full letter can be read below:
Dear Speaker Pelosi, Leader McCarthy, Leader McConnell, and Leader Schumer:
As small businesses throughout the country are receiving much-needed assistance from the bipartisan Paycheck Protection Program (PPP) and Emergency Injury Disaster Loan (EIDL) program, it has come to our attention that more help and flexibility within the programs are needed to ensure as many small businesses receive assistance as possible. We are particularly concerned about how these programs are affecting the restaurant industry, which has been especially crippled by the COVID-19 public health emergency.
In the United States, more than 3 million restaurant jobs and $25 billion in sales have been lost since March 1, 2020. During that same time frame, more than 100,000 jobs and $698 million in sales have been lost in Ohio alone, and more than two-thirds of the restaurants that have remained open surveyed by the Ohio Restaurant Association report that sales are down 50 to 90 percent. Certainly, Congress has acted expeditiously to enact new programs, such as the PPP, and expand existing programs, such as EIDL, to support small businesses and our nation’s workers as we work to make it through this crisis, but it is clear that Congress needs to do more for the hospitality industry, which includes restaurants.
Paycheck Protection Program (PPP)
First and foremost, we thank you for working to increase funding for the PPP and bringing the Paycheck Protection Program and Health Care Enhancement Act, up for a vote. This program has provided a valuable lifeline that has allowed small businesses to keep employees on payroll, and we know the additional $310 billion will further that goal.
In addition to adequately funding this program, Congress should address concerns about the terms of the PPP. This program provides loans to small businesses to help keep employees on payrolls and help small businesses pay their bills, but the forgiveness provisions only cover the eight-week period following loan origination. For the sake of our nation’s economy, we understandably hope to return to normalcy as quickly as possible, but the loan forgiveness stipulations currently in place do not consider some of the unique circumstances facing the hospitality industry. It is unrealistic to expect a complete and immediate return to business-as-usual upon reopening, and the terms of the PPP must reflect what will most likely be a gradual return to normalcy.
To more accurately account for this reality, we urge Congress to consider lengthening the forgiveness period from eight weeks after loan origination for PPP loans to a length of time that better reflects when businesses are more likely to become fully operational. For hospitality industry businesses like restaurants, that return could take six months or longer.
Emergency Injury Disaster Loan (EIDL) Program
As you know, EIDL assistance provides small businesses the working capital needed to meet their financial obligations and operating expenses that cannot otherwise be met due to the crisis. We are thankful that Congress has acted three times now to provide more funding for EIDL, and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) appropriately included a provision allowing for up to a $10,000 advance payment within days of SBA receiving an EIDL application from an eligible entity.
Unfortunately, for many businesses in the hospitality industry, this is not enough. Though Congress rightly acted to provide an additional $60 billion in funding for EIDL with the Paycheck Protection Program and Health Care Enhancement Act, we ask that the advance payment limit be raised to $20,000 to better serve those businesses in the hospitality industry that have suffered devasting revenue losses but must still meet their financial obligations.
We know that our economy is facing an unprecedented challenge during the COVID-19 public health emergency and that the actions of Congress and the Administration thus far have provided much-needed lifelines to support our nation’s businesses and employees. As this crisis wears on, however, we recognize that our work is not finished. Importantly, we can learn from our constituents about the efficacy of these programs in real time and responsibly fine-tune the programs as we move forward. For industries like the hospitality industry, program terms must be adjusted to more accurately reflect the long road ahead for their recovery.
We look forward to our continued work with Leadership as we make it through this pandemic together.
Published by The Business Journal, Youngstown, Ohio.