Long Island’s Congressional delegation called on the nation's largest banks to steer more coronavirus loans to “the smallest of small businesses,” vowing Friday to hold hearings on the federal Paycheck Protection Program loans.
The three Democrats and two Republicans said the big banks “should move up in the queue” companies with fewer than 20 employees that have applied for PPP. They said priority should be given to applicants seeking less than $150,000.
The delegation also called on the U.S. Treasury Department and Small Business Administration to issue new PPP guidelines, saying banks are confused about when the loans are forgivable and as a result only lending to well-known businesses.
President Donald Trump on Friday signed into law a new stimulus bill that includes more than $300 billion in federal guarantees for PPP loans. The initial $349 billion in guarantees was exhausted last week.
Rep. Thomas Suozzi (D-Glen Cove) said, “Many of the bigger employers received loans” before the guarantees ran out on April 16. “A lot of the smaller employers didn’t get loans,” he said.
Suozzi, citing SBA statistics, said businesses seeking $150,000 or less in loans accounted for only 17% of PPP funds while those seeking more than $1 million got 45%.
“We have to send a clear message to the banks: We’re watching. We need you to help the smaller small businesses,” he said.
Rep. Lee Zeldin (R-Shirley) urged companies that haven’t been harmed by the coronavirus pandemic and shutdown of nonessential activities to forgo the PPP.
“If you are flush with cash, if you are an individual who is sitting comfortably and wealthy – this is not a moment in time for you to be asking what your country can do for you to get through the pandemic,” he said, invoking a line from President John F. Kennedy’s 1960 inaugural speech.
Rep. Kathleen Rice (D-Garden City) said banks are afraid to lend to unfamiliar small businesses, fearing defaults and uncertain of how a PPP loan may be forgiven. “We have to put pressure on Treasury and SBA to give more guidance to banks,” she said.
Rep. Peter King (R-Seaford) and Rep. Gregory Meeks (D-St. Albans) speculated that the new federal loan guarantees may already be spoken for.
“A banker told me it will be gone in one or two weeks,” King said.
Meeks added, “Small businesses may be left out again because they are behind the line. The banks need to prioritize these folks, push them up in the queue.”
Separately Friday, three Senate Democrats, including Chuck Schumer, called on the SBA inspector general to investigate the first round of PPP loans.
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