LANGHORNE, PA—Today, April 19th, 2020, Congressman Brian Fitzpatrick (PA-01) made the following statement regarding the Treasury Department’s handling of the Paycheck Protection Program:
“Two things must happen immediately. First, Congress must immediately pass a clean supplement to the Paycheck Protection Program (PPP) by a minimum of $250 billion. Second, the Department of the Treasury? must immediately fix the PPP to benefit Main Street, not Wall Street. Round 1 of the PPP missed its target. Banks were receiving applications not just from mom-and-pop small businesses that depend on foot traffic and are barely solvent, like small restaurants, hardware stores and plumbers, whom the PPP was specifically designed to help. Banks were also receiving applications from businesses that are not small, do not rely on foot traffic and are not insolvent, like hedge funds and brokerage businesses, who in some cases received as much as $10M in forgivable loans. This is money that is literally being taken away from the very small businesses Congress intended to help, small businesses who have been forced to lay off workers due to insufficient cash flow. This has occurred because of ambiguous and insufficient guard rails being established by the Treasury Department with regards to the PPP. Many larger banks around the country simply prioritized their larger customers with significant banking relationships, taking money away from the small coffee shop owner. This cannot and will not stand. Our small businesses need our help and they need it now. The Treasury Department must establish clear requirements that banks prioritize insolvent coffee shop owners over solvent hedge fund owners. Businesses that depend on foot traffic and direct in-person contact, like small restaurants, are the businesses that are now insolvent because of this pandemic, and these companies account for nearly 50 percent of our nation’s workforce. It is unacceptable that the Treasury Department and the Small Business Administration? guidelines had no revenue loss requirements and only required an attestation that business was “negatively impacted” by COVID-19. A business with a 10% reduction in revenue for one month, who had no intention to lay off employees, must not be placed into the same category as an owner-operated daycare center with no cash flow and no way to survive. All Members of Congress must flag this issue to the Treasury Department and it needs to be fixed immediately.”
The Paycheck Protection Program (“PPP”) was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This program was established as an emergency lending program, managed by the Small Business Administration (SBA) under its 7(a) lending program, to provide small business loans on favorable terms to borrowers impacted by COVID-19. At $349 billion in new lending volume, it accounts for the vast majority of the small business assistance provided in the CARES Act.