Cantwell Urges Deputy Small Business Administrator Nominee to Fix Barriers to PPP Loans
WASHINGTON, D.C. – At a Senate Committee on Small Business and Entrepreneurship hearing today, U.S. Senator Maria Cantwell (D-WA) urged the nominee for Deputy Administrator of the Small Business Administration (SBA) to correct issues that have prevented some newspaper and broadcasters from applying for critical assistance from the Paycheck Protection Program. She also urged the nominee to fix SBA financial documentation requirements that prevent many Tribes from securing SBA assistance.
A number of newspapers and some broadcasters who have applied have faced challenges. Some SBA authorized lenders have rejected PPP applications when newspapers or broadcasters owned by a larger entity apply separately but with the same EIN of their parent company or have faced other issues with SBA systems. Some application are being held and others have been denied.
“Some of the applications [for newspapers and broadcasters] are being held…I hope that you would look at this and make sure that we're resolving these problems as it relates to newspapers [and broadcasters].” Cantwell said. She also called for funds to be set aside while SBA resolves technical issues.
Cantwell championed legislation that was passed in the December COVID-19 Economic Relief Bill that made local news outlets eligible for the Paycheck Protection Program. The provision made over 100 newspapers and broadcasting stations throughout Washington newly eligible for PPP funding, and more than 2,000 newspapers and 3,384 TV and radio stations newly eligible nationwide. For these loans to be forgiven, the local newspaper or broadcast station must spend at least 60% of the loan funds on payroll in order to keep journalists, newsroom workers, and other essential employees on the job.
Some SBA authorized lenders have denied Paycheck Protection Program loans to some Native-owned Small Businesses because they cannot meet SBA lenders’ documentation requirements. These tribal businesses do not file tax returns because they do not have to under their treaty rights and do not have Employment Identification Numbers (EINs). Cantwell secured the nominee’s commitment to address and fix this issue for Tribes.
Cantwell added, “Here’s another example that's very challenging, so the SBA lenders have denied Paycheck Protection Program loans to Native-owned small businesses because they don't meet the SBA’s documentation requirement. So we have 20 plus recognized Tribes in the Pacific Northwest and more than a thousand native-owned businesses [may have not been able to get access to PPP loans]...They've not been able to get COVID relief because they don't file tax returns because they don't have that obligation under the treaty rights. They don't have an Employment Identification Number so we need to figure out how to fix this.” Cantwell asked if a pilot program could be set up to provide them direct assistance.
“I commit to you that I would have that operating view on things in partnership with the team at the SBA. And we'll work with your office as well to make sure that those potential pilot programs are being explored given that the need is there and somehow they’re not being addressed.” Syed replied.
“It’s not the need, it’s they are being treated inequitably under the law just because of a previous right that they already had. So it's just the program didn't entail thinking about people who don't have an EIN so we just need to fix it. So thank you for your commitment to fixing it.” Cantwell responded.
Cantwell previously secured $3 billion in direct emergency assistance to Community Development Financial Institutions, (CDFIs) with $25 million targeted to assist Native communities and Tribal-owned businesses. This funding could benefit 30+ CDFIs that are in or around the State of Washington.
Video of Senator Cantwell’s Q&A is available HERE and audio is HERE.
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